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Singapore stock market and companies daily report (GuocoLand, GRP, Nico Steel Holdings) (October 15, 2012)

Contributed by Shares Investment

Back To Profitability In 1Q13 For GuocoLand
GuocoLand returned to profitability as it recorded net profits of $9 million for the first quarter ended 30 September 2012, compared to a loss of $12.8 million in the corresponding period. Underpinning the performance were higher revenue recognised from GuocoLand’s Singapore residential projects that boosted the company’s revenue by 67.3 percent to $181.6 million and a fair value gain of $4.5 million on the interest rate and foreign exchange hedges. Share of profit of associates and jointly-controlled entities went up by 50.6 percent. In September, the firm announced that it has sold about 40 units or 10 percent of the total 381 units in its free hold Leedon Residence condo in the Holland Road area. The project was launched in mid-August at an average price of $2,000 per square foot.
Significance: As at 30 September 2012, GuocoLand’s cash and cash equivalent stood at $223 million as compared to $660.7 million as at 30 September 2011. Moving forward, GuocoLand said it will continue to focus on strong execution of its current projects, as well as evaluate and explore investment opportunities in the current market environment.

GRP Invests $2.3m In Australian-Listed Aphrodite Gold
In an announcement filed with the Singapore Exchange, Singapore-based supplier of equipment to the mining and oil and gas industries GRP has entered into a subscription agreement with Australian gold mining company Aphrodite Gold. The arrangement will see GRP acquire 30 million new shares of Aphrodite for approximately $2.26 million. Thereafter, GRP will hold a 12.7 percent interest in Aphrodite. This makes the company Aphrodite’s single largest stakeholder. Among the projects Aphrodite is working on, Aphrodite Gold Project is the one in focus. Located some distance north of Kalgoorlie, Western Australia, the project comprises mainly of five granted mining leases totaling over 30 square kilometers of land and the deposit contains a Joint Ore Reserves Committee resource estimate of 1.04 million ounces. Recent drilling programs have returned with excellent results and production is targeted by 2014.
Significance: With gold commonly viewed as a hedge against inflation as well as currency risk, the investment gives GRP a strategic stake in Aphrodite which is trading attractively compared to its peers according to the company.

Nico Steel Posts 60.4% Dive In 1H13 Net Profit
Engineering solutions provider Nico Steel Holdings saw its results for the six months ended 31 August 2012 plummet due to the poor economic climate. A 40.6 percent decline in revenue contribution from its customised metal alloys segment and an increase in both administrative expenses and finance costs sent net profit 60.4 percent lower to US$275,000. Revenue was down 28.4 percent from US$26.7 million to US$19.1 million. Commercial metal alloys provided a bright spot as revenue from that segment nearly doubled. Meanwhile, gross margin remained stable at 12.7 percent. Geographically, China remained as the key revenue driver, contributing 66.4 percent of the company’s total revenue. Thailand, Singapore, and Malaysia contributed to the balance.
Significance: With most of the end users for Nico Steel’s electronics products from the US and Europe, a direct impact stemming from the Europe debt crisis and US’ sluggish recovery, to the company for the next six months seems almost certain.