FSL, PST – BT
DPUs fall at First Ship, Pacific Shipping in Q4
Income available for distribution also slips for both trusts
FIRST Ship Lease Trust (FSLT) and Pacific Shipping Trust (PST) both saw their distribution per unit (DPU) fall for the fourth quarter and full year of 2010.
FSLT recorded DPU of 0.95 US cents in Q4, a 36.7 per cent dive from 1.5 US cents for the year-ago period. PST saw a much milder dip, with its DPU down 2 per cent to 0.809 US cents from 0.827 US cent.
Both trusts saw fourth-quarter income available for distribution slipping. FSLT’s fell 36.7 per cent to US$5.68 million from US$8.98 million, while PST’s slid 8 per cent, from US$7 million to US$6.44 million for the quarter.
For the full year, total DPU for FSLT was 4.35 US cents, down from 7.90 US cents. PST’s stood at 3.227 US cents, down from 3.615 US cents.
Full year income available for distribution dropped for FSLT to US$28.48 million from US$50.85 million, whereas PST’s was US$26.52 million, down 2 per cent against 2009’s US$27.07 million.
FSLT posted revenues of US$24.1 million in the fourth quarter, 1.5 per cent down y-o-y, and US$100.5 million for the full-year, up 1.7 per cent from FY2009.
PST’s gross revenue from its 12 long-term charter vessels also stayed flat at US$15.3 million and US$61.3 million, a drop of 2 and 1 per cent, for the quarter and full-year period, respectively.
PST’s net profit shed 8 per cent to US$6.57 million for the quarter and was lower by 1 per cent at US$27.1 million for the full year.
FSLT sank into the red for the fourth quarter, with a loss of US$928,000, from profits of US$1.8 million in the same period last year. It also recorded losses of US$5.69 million for the full year, as compared with profit of US$8.42 a year ago.
Affecting FSLT’s bottom line was the arrest and re-delivery of two of its vessels, FSL Hamburg and FSL Singapore mid-last year.
FSLT took delivery of the vessels after their charterers said in May they ‘did not intend to continue to make full lease payments under the bareboat charter lease agreements’.
In June, they were subsequently arrested by Daxin Petroleum in China and Japan, as Daxin had not been paid for bunkers supplied to these vessels.
The overall financial impact of their arrest and re-delivery was at a cost of US$11.2 million to FSLT.
FSLT units gained half a US cent to end at 47.5 US cents in trading yesterday. PST closed half a US cent up at 37 US cents.
CCT – BT
CCT Q4 distributable income rises 3.4% to $54.7m
CAPITACOMMERCIAL Trust (CCT) yesterday reported a 3.4 per cent climb in distributable income to $54.7 million for the fourth quarter ended Dec 31, 2010, from $52.9 million a year ago. Distribution per unit (DPU) rose from 1.88 cents to 1.94 cents, the office landlord partly owned by CapitaLand said.
Distribution rose even as net property income fell 11.4 per cent from $80 million to $70.9 million as CCT sold off two assets – StarHub Centre and Robinson Point – over the year. For the whole financial year ended Dec 31, 2010, CCT reported distributable income of $221 million, some 11.3 per cent above 2009. The DPU for 2010 works out to 7.83 cents and is a 10.9 per cent increase from 2009’s 7.06 cents.
For this year, CCT expects negative rent reversions for the leases expiring in 2011, which will hit the trust’s operating revenue for this year. ‘Despite the (recent) upturn, prime office rentals are still approximately 48 per cent below the peak achieved prior to the recent global financial crisis. As a result, negative rent reversions are expected for the leases expiring in 2011. This will negatively affect the trust’s operating revenue in 2011, although the impact should be mitigated by generally rising office rental rates,’ said CCT.
But demand for its properties is still strong, CCT stressed. ‘In tandem with the optimistic economic outlook for Singapore and Asia, the resultant office market recovery and our proactive tenant engagement, we continue to experience positive growth in office demand from our tenants,’ said Lynette Leong, chief executive of the trust’s manager.
She acknowledged that some of CCT’s tenants have taken up new space in other buildings. But other existing tenants are also looking to expand within CCT’s properties, she said, adding: ‘That demand will help to backfill whatever vacancy is created by tenants leaving for other buildings.’
Ms Leong also said that CCT is on the lookout for Grade A office space within the central business district to buy and add to its portfolio.
‘The trust has internal resources and debt capacity to seize investment opportunities of up to $1.6 billion without exceeding the gearing of 40 per cent,’ she said.
The trust also gave an update on its Six Battery Road property, which is undergoing asset enhancement works. Of the 65,600 square feet of lettable area expected to be upgraded and available in 2011, 52 per cent has already been pre-leased to new and existing tenants, CCT said.
CCT shares rose 2 cents to close at $1.53 yesterday.
FCOT – SGX
Trust Deed Amendment to Remove Trustee’s Acquisition Fee and Divestment Fee
Singapore, 20 January 2011 – Frasers Centrepoint Asset Management (Commercial) Ltd. (the “Manager”), as the manager of Frasers Commercial Trust (“FCOT”), wishes to announce the amendment of the trust deed dated 12 September 2005 constituting FCOT (as amended and restated) (the “Trust Deed”) by way of a seventh supplemental deed.
The seventh supplemental deed has been entered into today between the Manager and British and Malayan Trustees Limited, as trustee of FCOT (the “Trustee”), to amend the Trust Deed to remove the Trustee’s acquisition fee and divestment fee from the remuneration of the Trustee such that the Trustee will no longer be entitled to receive such fees, to be in line with market practice.
The Trust Deed will be available for inspection at the registered office of the Manager and the registered office of the Trustee.
HPH Trust – BT
US$6b Hutchison port IPO to berth at S'pore
Outfit controlled by Li Ka-shing plans mega SGX listing that could dwarf even SingTel's '93 debut
In what could trump SingTel's record-setting initial public offering (IPO), Hong Kong-listed Hutchison Whampoa announced yesterday that it plans to spin off its port assets in Hong Kong and China into a separate listing on the Singapore Exchange (SGX).
According to reports, the listing of Hutchison Port Holdings Trust (HPH Trust) aims to raise as much as US$6 billion. This is more than the entire amount raised on the SGX in 2009 – S$3.1 billion.
Hutchison Whampoa – the biggest container terminal operator in the world – is controlled by billionaire Li Ka-shing.
If the IPO goes through, it will dethrone SingTel's 1993 IPO, which raised about S$4 billion, in the proceeds stakes.
The trust will operate and develop deep-water container ports in Guangdong, Hong Kong and Macau.
Its portfolio will encompass Hutchison Whampoa's entire interests in its subsidiaries which include Hongkong International Terminals (HIT) – the owner and operator of Terminals 4, 6, 7 and two berths in Terminal 9 at Kwai Tsing in Hong Kong – as well as Cosco-HIT, the owner and operator of Terminal 8 East, also at Kwai Tsing.
In 2005, PSA International bought a 20 per cent stake in both HIT and Cosco-HIT for US$925 million in cash, as part of its strategy to gain a foothold in Hong Kong.
While HPH Trust's IPO might be Singapore's largest if the US$6 billion figure is borne out, the Hutchison ports business represented a superlative of another kind for Singapore in 2006.
That year, PSA International made what was its biggest ever investment – paying US$4.4 billion for one-fifth of Hutchison Whampoa's port network, which made it a holder of substantial minority interest.
'PSA International is in full support of the establishment of this new entity and its proposed public listing,' said Fock Siew Wah, group chairman of PSA International.
'It believes that the listing of the HPH Trust will best meet the growing needs of Hutchison Port Holdings' global port operations and satisfy, at the same time, the needs of the international institutional investors and the general investing public for good investment grade business trust stocks.'
Coincidentally, PSA group chief executive Eddie Teh – whom BT learned yesterday is due to retire in August – was formerly an executive with Hutchison.
For Hutchison Whampoa, this spin-off and listing will make sense.
'It's capitalising future gains and selling them to the market,' said Roger Tan, vice president of SIAS Research.
A formal application to spin off the trust was made to the Hong Kong Stock Exchange last Friday. The Hong Kong bourse's policy of allowing only real-estate investment trusts to list might have propelled HPH Trust into seeking a listing on the SGX, which does not have a similar restriction.
Speaking to the media and analysts at the SGX's Q2 earnings briefing yesterday, the exchange's chief executive officer, Magnus Bocker, declined to comment on whether competition for the listing had been great amongst exchanges. 'We are very proud that they have made the choice to come to Singapore,' said Mr Bocker.
According to the Wall Street Journal, people close to the deal said that the IPO could be launched either in late-February or early-March if it gets all the necessary approvals. Other estimates have pegged the launch date closer to the end of March or early-April.
If the deal goes through, Hutchison Whampoa will hold 25 per cent of the trust's units.
Others, however, have expressed scepticism at the reported aim of raising US$6 billion in IPO proceeds in a market like Singapore's.
'How much did SingTel raise?' one industry analyst asked incredulously when asked about the possibility of drawing US$6 billion from the IPO. 'I'm not sure there will be enough subscriptions to soak up such a large issue. It would depend on how much is floated.'
Cambridge – DMG
Compulsory acquisition of land
The news: CIT has received formal notice from the Singapore Land Authority (SLA) on 11 Jan 2011 with regards to the compulsory acquisition of land in Tuas area (western part of Singapore) for the construction of the Tuas West Mass Rapid Transit extension and road works. All or part of the land where these properties are situated will be possessed by the Government by January 2013.
Our thoughts: Based on the company’s initial assessment, three of CIT’s 43 properties will be affected to varying degrees by this land acquisition: (i) 1 Tuas Ave 3 – likely to be wholly acquired, but management feels minimal impact as CIT has two years to work with tenant to look for an alternative site or possibly develop a facility for CWT, so loss of NPI may not materialise at all. (ii) 30 Tuas Road – only entrance expected to be impacted, likely truncated (iii) 120 Pioneer Road – least impact, grass patch in front of building. As management will be meeting up with the authorities in the next two weeks, management should have more details by release of its 4Q10 results on 11 Feb. Maintain BUY, with TP of S$0.61.