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Stocks to watch: SMRT, Olam, Vard, Keppel T&T

Thursday, July 21, 2016 - 08:49
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The meeting will determine if Belford will acquire 100% shareholding of SMRT at a scheme price of S$1.68 apiece.

SMRT Corp: Singapore's Temasek Holdings has proposed a S$1.2 billion buyout of the rail operator at S$1.68 per share. This values SMRT at some S$2.57 billion and is an 8.7 per cent premium over its last traded price of S$1.545 on July 15; it is also a 10.7 per cent premium over its three-month volume-weighted average price prior to the last trading day. Trading in the counter resumes on Thursday.

This follows an earlier announcement that SMRT will sell its rail assets to the Land Transport Authority for S$991 million under the New Rail Financing Framework. Under this framework, SMRT's Ebit (earnings before interest and tax) margin will be capped at an average of 5 per cent.

Olam International: The commodity trader on Wednesday issued US$500 million in subordinated perpetual securities. The securities are expected to be admitted to Singapore Exchange from 9am on Thursday.

Vard Holdings: Weighed down in part by restructuring costs, the company on Thursday reported a net loss of 53 million kroner (S$8.46 million) for the second quarter ended June 30, 2016, versus a net profit of 58 million kroner a year ago.

Revenue slid nearly 11 per cent year on year to 2.22 billion kroner, mainly due to lower activity levels at the European yards and at Vard Niteroi in Brazil.

Restructuring costs of 38 million kroner were racked up during the quarter due to statutory payments from temporary layoffs and termination benefits, mainly at Vard Niteroi where it has ceased shipbuilding activities. The corresponding figure for Q2 FY2015 was 14 million kroner.

In line with lower revenue and the restructuring costs, it turned in an operating loss of 78 million kroner in Q2 FY2016.

Financial costs also widened from 60 million kroner previously to 121 million kroner, while share of results of associates totalled losses of nine million kroner versus profits of three million kroner a year ago.

Loss per share was 0.04 krone compared to earnings per share of 0.05 krone a year ago.

Keppel Telecommunications and Transportation (Keppel T&T): The data centre and logistics provider posted an 18.5 per cent rise in net profit to S$18.81 million for the second quarter.

The better profit was attributed largely to higher contribution from its Data Centre division.

The three months ended June 30 saw operating profit up 79.3 per cent at S$8.31 million as revenue climbed 2.1 per cent to S$50.18 million and operating expenses fell 6.4 per cent to S$43.84 million.

Earnings per share rose to 3.4 Singapore cents from 2.9 Singapore cents a year earlier.