Reports » Singapore

Singapore stock market and companies daily report (SMRT, CDLHT) (February 01, 2012)

Contributed by Shares Investment

Singapore’s Unemployment Shows Lowest Record In 14 Years
Singapore’s unemployment rate encouragingly fell to a 14-year low in 2011. Preliminary estimates show that total employment grew by 36,300 in 4Q11, bringing growth in the whole of 2011 to 121,300. This was higher than the gains of 115,000 in 2010. The services sector had the most to gain, with an added 95,100 jobs in 2011. Construction employment rose by 22,200 last year as it was given a boost by public projects. Manufacturing employment grew by 2,900, as losses of 1,900 in 4Q11 offset the total gains of 4,800 in 9M11. For FY11, the unemployment rate averaged 2% overall, 2.9% for residents and 3% for Singapore citizens, largely due to the strong employment creation. These rates were the lowest recorded since 1997, after declining from 2.2% for overall, 3.1% for residents and 3.4% for Singapore citizens in 2010.

Significance: Moving forward, service sector – particularly tourism and the financial industry- is expected to drive growth in Singapore’s gross domestic product. As the gaming market in Singapore is expected to draw close to $9 billion in revenue this year, the strong growth in aforesaid market should at least help to cushion any fallout in the major sectors.

SMRT Posts Lower 3Q12 Earnings On Higher Costs
SMRT Corporation (SMRT)’s 3Q12 earnings fell 13.9% to $37 million despite a 10% jump in revenue to $268.2 million, mainly due to a 14.8% jump in repairs and maintenance costs as well as a 30.6% increase in electricity and diesel costs. SMRT’s 3Q12 train operations saw revenue grow 9.2% to $144.9 million, but operating profit took a 14.4% hit, shrinking to $25.7 million. Revenue from Bus operations was 3.3% higher at $54.4 million due mainly to higher ridership. Taxi rental revenue, on the other hand, increased by 28.4% to $29.6 million, due mainly to higher rental revenue from a larger average hired out fleet. Despite analyst concerns about a tightening of dividend payouts in anticipation of the expensive aftermath of the interruptions, SMRT said that it would ‘endeavour to maintain the dividend payout each year’ and that there was no intention to change its dividend policy.

Significance: SMRT’s current estimate of disruption-related expenses stands at a couple of million dollars. While the firm’s revenue is expected to be higher in 4Q12 on the back of increase in ridership, investors have been warned that the segment’s profitability over the next 12 months will be affected by the consequential costs from the train service disruptions.

CDL Hospitality Trusts’ 4Q11 DPU Jumps 5.8% To $0.0294
CDL Hospitality Trusts (CDLHT) posted a 12.7% jump in 4Q11 net property income to $35.5 million on the back of a 13.4% jump in gross revenue to $37.8 million, attributed mainly to improved hospitality performance across the portfolio and contribution from Studio M Hotel in Singapore. Fuelled by the growth in visitor arrivals, revenue per available room (RevPAR) of the hotels here, excluding Studio M, increase 6% year-on-year to $205 in 4Q11, the highest Q4 RevPAR since CDLHT’s inception in 2006, supported by high average occupancy of 88.6% in the quarter. Including Studio M, the RevPAR for the Singapore hotels increased 6.1% to $200 in 4Q11.

Significance: Singapore remains CDLHT’s preferred market in terms of visibility and prospects. Particularly, the range of new attractions in Singapore – including the first phase of the Gardens by the Bay and the River Safari – as well as the stronger events calendar in 2012 could continue to draw visitors to Singapore.