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Stocks to watch: Keppel Corp, Cromwell E-Reit, Straits Trading, Del Monte
THE following companies saw new developments that may affect trading of their shares on Friday:
Keppel Corp: Keppel Land, a unit of mainboard-listed Keppel Corp, has secured its first green loan facility via subsidiary Keppel LandChina for the Phase 1 development of Seasons City in the Sino-Singapore Tianjin Eco-City. The green loan, disbursed by HSBC Group China, amounts to 850 million yuan (S$170 million) and will be on a five-year term. This is also the first green loan granted by the HSBC Group China for the development of a property project in mainland China, Keppel announced in a bourse filing on Thursday. Shares of Keppel Corp closed on Thursday at S$6.57, up six cents.
Cromwell European Real Estate Investment Trust (Cromwell E-Reit): Cromwell E-Reit will buy three freehold properties in France, and three freehold properties in Poland for a total of 239.6 million euros (S$366.9 million), financed with a mix of debt and equity through a private placement. The six acquisitions are expected to increase the Reit’s distribution per unit and strengthen its portfolio, said the Reit’s manager on Friday morning before the market opened.
The manager intends to draw down loans from new debt facilities that are currently being established, to fund the acquisitions. It will also issue new Cromwell E-Reit units via a private placement to raise gross proceeds of at least 100 million euros. The placement may be upsized by up to 50 million in gross proceeds. The manager on Friday morning requested for a trading halt for Cromwell E-Reit, pending the release of these announcements. Units in Cromwell E-Reit last traded at 50.5 euro cents on Thursday, down 3.8 per cent, or two cents.
Straits Trading Co: Straits Real Estate (SRE), a unit of mainboard-listed Straits Trading Co, has entered a partnership in South Korea with real estate investment firm IGIS Asset Management to invest in logistics facilities in Greater Seoul, with an initial capital commitment of KRW110 billion (S$127 million). Construction of the South Korean facility is expected to commence in July 2019, and be completed by the first quarter of 2021 (see amendment note). Once fully deployed, it is expected that the initial commitment will have a portfolio of up to KRW400 billion, SRE announced on Thursday after the market closed. Separately in Australia, SRE is also about to complete the acquisition of a land parcel for a build-to-suit project in Adelaide, through its joint venture with Commercial & General. The total development cost for the project will be about A$44.3 million (S$42.2 million). The project is targeted to be completed by Q3 2020. Shares of Straits Trading closed at S$2.25 on Thursday, down one cent.
Del Monte: Food and beverage player Del Monte saw earnings more than double to US$6.3 million for the fourth quarter ended April, compared to a year ago. This was aided in part by a higher gross margin of 15.9 per cent for Del Monte's US subsidiary DMFI, compared to 13.3 per cent in the same period last year. Meanwhile, Q4 sales dropped 13.3 per cent year-on-year to US$432.6 million, 13 per cent lower than the prior year's quarter.
For the full year, Del Monte posted earnings of US$20.3 million, a turnaround from the US$36.5 million loss a year ago. The company's board has approved a final dividend of US$0.0052 per share, representing 50 per cent of FY2019 net profit. Shares of Del Monte closed flat at S$0.12 on Thursday.
Amendment note: An earlier version of this article incorrectly stated that construction of the South Korean facility is targeted to be completed by Q3 2020, with total development cost of AS$44.3 million. These were details with regards to SRE's acquisition in Adelaide, and the article above has been revised to reflect this.