COMPANIES MARKETS WEDNESDAY, 20 APRIL 2016, PAGE … · known as Lava Jato, or Carwash, that has paralysed Congress and deep-enedtheworstrecessioninoveracen-tury. Brazil, traditionally

By Gladys [email protected]

SingaporeTHE Institute of Valuers and Apprais-ers of Singapore (IVAS) and NanyangTechnological University (NTU) havejointly launchedtheCharteredValuerand Appraisal programme amid ris-ing demand for professionals withstrong competencies and experiencein business valuation, they said in ajoint press release on Tuesday.

ThiswillbeAsia’s firstprogrammein business valuation, they added,saying that the aim of the course isforparticipants togain “deep insightsand exposure to diverse perspectivesand approaches in business valua-tion” that are easily applicable.

Eric Teo, chairman of IVAS, notedthe growing importance of businessvaluation. “Professionals and corpo-rate executives who perform busi-ness valuation need to be equippedwith specialised knowledge andskills; strong values and ethics; andsubstantial practical experience in or-der to do the work well.”

At the launch of the programme,Senior Minister of State for Financeand Law, Indranee Rajah, who deliv-ered the keynote speech, said the in-creasedneedforqualifiedprofession-als in business valuation was due tofour key trends: increase in merger &acquisition activities in Singaporeand the region, Singapore’s growth asanarbitrationcentreandcentrefor lit-igation proceedings, the emphasis onfair value measurement in financialreporting framework, and the impor-tance of intellectual property in busi-ness.

The inaugural class will be held inAugust this year and the course willbe delivered and facilitated by NTU’sNanyang Business School.

Participants in the 18-monthcourse can choose to either attendclasses or self-study. The flexibilitycaters toprofessionals from Asiawhowish to take up the programme, IVASand NTU said. Upon completion, par-ticipantsmayapply to IVASforcertifi-cation, provided they have accumu-lated sufficient experience. The exactcriteria for certification will be an-nounced later this year.

The programme is supported bythe SkillsFuture Study Awards, whichwill offer participants S$5,000 to de-fray the costs of the programme.

By Jamie [email protected]@JamieLeeBT

Singapore

SHARES of Keppel Corporation roseon Tuesday, despite the company re-porting a slump in first-quarter earn-ings at the start of the week, even assome analysts warn of a long droughtahead for the oil and gas giant, andare watching the group’s gearing lev-el closely.

The stock closed at S$6.07 at theendof trading,upseven cents or1.17per cent. Some seven million shareschanged hands.

Analysts, most of whom now havea “hold” rating on the stock, accord-ing to Bloomberg data, noted thatKeppel’s property portfolio is nowholding the fort, with the divisionmaking up 47 per cent of group prof-it. Keppel’s offshore and marine(O&M) business now contributes 45per cent to the group earnings.

This comes as net profit for Kep-pel Corporation dropped 42 per centto S$210.6 million for the first quar-ter, on the back of a 38 per cent fall inrevenue.

Its revenue dropped to S$1.74 bil-lion from S$2.81 billion, as highersales from the property division onlypartially offset reduced sales in theO&M, infrastructure and investmentdivisions.

Revenue from the O&M divisionplunged 58 per cent, or S$1.1 billion,to S$818 million, no thanks to lowerwork volume, deferment of certainprojects, and suspension of the SeteBrasil contracts.

The group registered strong prop-erty sales, led by positive demand inChina, namely Shanghai, Chengdu,TianjinandWuxi, notedaresearchre-port by UOB Kay Hian. But O&M earn-ings have more than halved.

“O&M contract wins remain a ma-jor earnings risk,” noted the broker-age, which downgraded its rating to a“hold”, following the 25 per cent rallyin the stock in a quarter.

“With deliveries dragged out and atail-heavy payment structure for itsO&M JU (jack-up) orders, cash flowwill be tight,” said UOB Kay Hian,which had a target price of S$6.40.

Keppel’s net gearing of 56 per centisexpected tocreepupto62percent,it added, noting that the group will bewatching the debt level closely.

“Entering a long drought,” saidCIMB Research, which downgradedthestockfrom“hold” to “reduce”afterlowering its O&M revenue and profitassumptions for infrastructure andinvestment. “The uncertainty inBrazil’s political scene and oil pricesmay hamper further negotiation ofSete Brasil’s projects progress anddims hope of a write-back.”

It has a target price of S$5.14 onthe stock.

KGI Fraser upped its rating from a“sell” to a “hold”, spurred by hopesover Keppel’s property business. Itstarget price stands at S$5.60. “We ex-pect Keppel’s valuations going for-ward to be largely reliant on its prop-erty segment, with an upside sur-prise if oilpricescanhaveasustainedrecovery of more than US$50 byH216.”

By Melissa [email protected]@MelissaTanBT

Singapore

LIFESTYLEproductsgroupOSIMInter-national, the target of a privatisationbid by its founder Ron Sim, hasdropped its usual first-quarter inter-imdividend after adismal set of earn-ings.

This came as weaker sales in itscore markets and cost pressures tookatollonmargins,whiledimmingpros-pects of the stock possibly being

worth more than Mr Sim’s S$1.39 of-fer price anytime soon.

Net profit for the three monthsended March 31 plummeted 42 percent from the previous year to S$7.84million, the group said in a SingaporeExchange filing on Tuesday after themarket closed.

That worked out to earnings pershare of 1.06 Singapore cents for Q1,down from 1.75 Singapore cents theprevious year.

OSIM declared no interim divi-dend in the quarter, a drop from the

one-cent interim dividend in theyear-ago period. Before this, thegroup had declared Q1 interim divi-dends at least since 2011.

The weaker earnings came on theback of a 7.7 per cent drop in revenueto S$138.3 million year-on-year,which the group said was mainly dueto an “overall weaker environment”.

“Markets remain soft and the chal-lenge will be to maintain marginsamid rising fixed cost pressure. Dueto prolonged soft market conditions,we will also adopt a cautious ap-

proach to invest for growth and con-tinue to rationalise unprofitablestores,” it said in its statement.

CIMB analyst Kenneth Ng saidOSIM’s Q1 performance could besummed up in one word: “Poor”. Theearnings also suggest that “the onlythingholdingup theshare price is theoffer”, he added, referring to Mr Sim’sprivatisation bid.

Mr Sim recently raised his offerprice to S$1.41 including a two-centdividend, or S$1.39 ex-dividend. Thiswas after an apparent mistake madein the takeover process, in which

offer price of S$1.39.

Singapore

KEPPELCorp, theworld’s largestbuild-er of oil rigs, said it won’t resumework for a key Brazilian client untilthe customer restarts making pay-ments on its orders.

Sete Brasil Participacoes SA, em-broiled in a corruption probe knownin Brazil as Lava Jato and debatingwhether it should file for bankruptcy,stopped paying Keppel last year onits orders for rigs. Keppel announceda S$230 million charge in January onthe delinquent projects.

Dilma Rousseff’s Brazilian presi-dency is hanging by a thread amid atwo-year corruption investigationknown as Lava Jato, or Carwash, thathas paralysed Congress and deep-enedtheworst recessioninoveracen-tury.

Brazil, traditionally one of the keymarkets for Keppel’s offshore busi-ness, “continues to be mired in politi-cal and economic challenges as wellas the Lava Jato scandal,” chief execu-tive officer Loh Chin Hua said duringawebcaston Monday. “Globally, we’reseeing layoffs, mergers as well aslarge reductions in capital expendi-

ture as the industry prepares for along winter.”

Keppel,whichhasbeencuttingem-ployees, said its global workforce hasbeen further reduced by 9.4 per cent,or about 2,800 positions, since thestart of 2016. Should there be a needfor further “right-sizing”, the compa-ny will do so, Mr Loh said.

Keppel stopped construction onSete Brasil’s rigs since the end of2015, the CEO said. Sete Brasil ac-counts for a combined US$10.5 bil-lion in orders for semi-submersiblesand drill ships at Keppel and Sem-bcorpMarineLtd, theworld’s two larg-est builders of oil rigs.

The rig division faces a “prolongedperiod” in which orders “will not behigh”, Chow Yew Yuen, chief execu-tive officer of Keppel Offshore & Ma-rine Ltd, the company’s largest busi-ness, said during the webcast.

For Keppel and Sembcorp Marine,the troubles in Brazil add to theirwoes caused by a plunge in oil prices.Slumping crude also has draggeddown orders at Sembcorp Marine,which earns almost all its profit frombuilding oil rigs. Keppel gets abouthalf its profit from that business.

Brazil.

said.

per cent to S$1.815.

construction. BLOOMBERG

Keppel shares up;analysts warnof long drought

OSIM drops dividendas Q1 earnings fall 42%

IVAS, NTUlaunch businessvaluation course

rigs until client restarts payments

Markets still soft and challenge is to maintain margins amid rising fixed cost pressure, says company

InvestorRelationsHighlights

Go to www.shareinvestor.com

GKE committed to deliver profitabilityGKE’s effort in streamlining and expanding its businesses to diversifyand strengthen its earnings base, is paying off amid the challengingbusiness environment. The Group narrowed its net loss to S$0.4 millionfor 9M FY2016 with positive maiden contribution from the newly acquiredchemical warehouse operator, Marquis Services. Going forward, GKE isprudently optimistic on the positive contributions from its two strategicinvestments – (i) liquefied gas carrier vessel which has entered into achartering contract starting mid-April 2016, and (ii) ready-mix cementplant in Wuzhou, China, which has commenced trial production inJanuary 2016. These contributions will broaden GKE’s earnings base fromits existing warehousing and logistics business. The sale of 30 PioneerRoad property for S$45 million, which nets a gain of S$12.7 million wascompleted recently. GKE remains committed to strengthen its earningsbase for stable and sustainable growth in the long term.

TEE International’s 9MFY16 net profit up 32.4% to $7MTEE’s total outstanding engineering order book stood at S$306 million,of which more than half of the orders are attributed to Singapore-basedprojects. TEE continues to focus on bidding for projects with high-valueand complex engineering components under the M&E division, as well asfast turnaround mission critical rebuilding projects under the Building andConstruction division.Under its Real Estate business, residential units of its Singapore project,183 LONGHAUS is 65% sold while Third Avenue in Malaysia is 70% sold.On 5 April 2016, TEE’s associated company, Chewathai Public CompanyLimited was successfully listed on the Market for Alternative Investmentof the Stock Exchange of Thailand.

Strategic Marine secured US$50.1m contract for two LNG-powered aluminium catamaransTRIYARDS Holdings Limited, a fabrication and engineering solutionsprovider for the global offshore & marine industries, has won a US$50.1million contract through subsidiary, aluminium shipbuilding specialist,Strategic Marine.Signed with leading Dutch ferry operator Royal Doeksen, the contractis for the construction of two Liquefied Natural Gas (LNG)-poweredaluminium catamarans, each carrying up to 600 passengers and 64cars. These RoPax ferries also feature an efficient single-fuel propulsionsystem that meets stringent emissions requirements. Construction willbegin this summer with delivery scheduled for 2Q2018.Strategic Marine’s Chief Executive Officer, Mr Mark Schiller, said: “Weforesee an increased focus in the environmental aspects of marinetransportation and LNG emerging as the fuel of choice.“Our focus on the large ferry market is beginning to reap the desiredresults with this recent win. We will continue to broaden our verticalproduct chain for aluminium vessels.”

OSIM International

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The Business Times | Wednesday, April 20, 2016COMPANIES &MARKETS

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