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Headliners (SMRT Corp, Cerebos Pacific, Tiger Airways Hldgs)
Headliners | 03 February 2012
By: Andy Chor
Articles (7) Profile

Singapore’s Unemployment Rate Shows Lowest Record In 14 Years
Singapore’s unemployment rate encouragingly fell to a 14-year low in 2011. Preliminary estimates show that total employment grew by 36,300 in the fourth quarter, bringing growth in the whole of 2011 to 121,300. This was higher than the gains of 115,000 in 2010. The services sector had the most to gain, with an added 95,100 jobs in 2011. Construction employment rose by 22,200 last year as it was given a boost by public projects. Manufacturing employment grew by 2,900, as losses of 1,900 in the fourth quarter offset the total gains of 4,800 in the first nine-month period. For 2011, the unemployment rate averaged 2% overall, 2.9% for residents and 3% for Singapore citizens, largely due to the strong employment creation. These rates were the lowest recorded since 1997, after declining from 2.2% for overall, 3.1% for residents and 3.4% for Singapore citizens in 2010.

SMRT Posts Lower 3Q12 Earnings On Higher Costs
SMRT Corporation’s 3Q12 earnings fell 13.9% to $37m despite a 10% jump in revenue to $268.2m, mainly due to a 14.8% jump in repairs and maintenance costs as well as a 30.6% increase in electricity and diesel costs. SMRT’s 3Q12 train operations saw revenue grew 9.2% to $144.9m, but operating profit took a 14.4% hit, shrinking to $25.7m. Revenue from bus operations was 3.3% higher at $54.4m due mainly to higher ridership. Taxi rental revenue, on the other hand, increased by 28.4% to $29.6m, due mainly to higher rental revenue from a larger average hired out fleet. Despite concerns about a tightening of dividend payouts in anticipation of the expensive aftermath of the interruptions, SMRT said that it would ‘endeavour to maintain the dividend payout each year’ and that there was no intention to change its dividend policy.

Cerebos: Consistent Dividend Despite Lower 4Q11 Earnings
Cerebos Pacific, producer of the well-known Brand’s Essence of Chicken, reported a 20% fall in 4Q11 net profit to $34.1m, largely due to flooding in Thailand and a stronger Singapore dollar. Despite the fall in net profit stemming from the rising raw material costs, unforeseen events and allocation of funds for capital expenditure, Cerebos remains committed to paying out generous dividends. Recently, a first and final dividend of $0.06 per share, and a bonus dividend of $0.19 per share had been recommended. For the past three years, Cerebos had averaged $0.27 dividend per share. In addition, Cerebos has decided to abandon its bid to buy New Zealand honey products company Comvit following strong resistance from its controlling shareholders. Moving forward, Cerebos plans to invest more than $80m in Thailand to expand its capacity in order to supply high growth market like Hong Kong and Singapore. Potentially, this will include a second factory as its current plant in Thailand had reached full operating capacity. As at end of Dec-11, Cerebos’s cash and cash equivalents stood high at $137m.

Tiger Sinks Into The Red In 3Q12
Tiger Airways recorded a loss of $17.4m for 3Q12, compared to a $22.5m profit for 3Q11. Passenger numbers and seat capacity were 12% and 2.7% lower, respectively, in 3Q12 compared to the same period last year, due to the under-utilisation of the Tiger Airways Australia fleet as a result of its reduced flying programme. Despite the reduction in passengers, passenger seat revenue increased by 2.8% to $139.9m from $136.1m, resulting from a 16.9% increase in average passenger fares. A 33.9% increase in fuel prices compounded Tiger’s problems leading its bottom line into the red as total expenses increased by 26% in 3Q12. Separately, Tiger has made progress in its expansion plans in the region with the purchase of a 33%-stake in Mandala Airlines in Indonesia. Mandala is currently in the process of reactivating its Air Operator’s Certificate. Tiger intends to deploy some of its aircraft to Mandala in 4Q12, with Mandala expected to commence commercial operations in 1Q13.

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