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Stocks to watch: SMRT, SPH, M1
THE following companies made material announcements on Friday which could affect the trading of their shares.
SMRT Corp: The rail operator will transfer its rail assets to the government for S$991 million, subject to shareholder approval.
The Land Transport Authority has arrived at an agreement with SMRT Trains on the New Rail Financing Framework (NRFF) to transfer the ownership of the North-South and East-West Lines, the Circle Line and the Bukit Panjang LRT; the operating assets include the trains, signalling system and maintenance equipment.
Under SMRT Trains' new NRFF licence, it will operate the above lines for 15 years from Oct 1, 2016, with the possibility of a five-year extension - much shorter than the original 30 to 40 years.
LTA will own the operating assets and share in an asset-light SMRT Trains' risks and rewards, with the aim of allowing the listed company to achieve an average Ebit (earnings before interest and tax) margin of 5 per cent.
Singapore Press Holdings (SPH): The group's net profit for its fiscal third quarter fell 46.4 per cent to S$52.7 million after the company made significant impairments due to a weak magazine business. Third-quarter operating revenue shrank 5.7 per cent to S$296.7 million, weighed down by media revenue's 7.1 per cent decline to S$216.6 million.
Property revenue improved 1.6 per cent to S$60.3 million despite a "subdued retail environment" as rental and services revenue increased. The group recorded a S$28.4 million impairment of goodwill and intangibles - versus the year-ago impairment of S$1.1 million. That was "primarily related to the magazine business, whose performance was affected by unfavourable market conditions", SPH said.
M1: The telco posted a net profit of S$41 million for the three months ended June 30, 2016, a 7.5 per cent fall from S$44.3 million a year ago. This came on the back of a 13.2 per cent fall in revenue to S$240.4 million, due mainly to lower handset revenue. The latter almost halved year on year from S$72.7 million to S$36.4 million, on lower sales volume and selling price. Earnings per share dropped nearly 7 per cent to 4.4 Singapore cents.
For the six months ended June 30, 2016, net profit fell 7.2 per cent to S$83.5 million, on "increased depreciation and amortisation expenses from higher fixed asset base in respect of 4G network and new services".
Half-year revenue slipped 12.9 per cent to S$498 million, hit also by lower handset sales.