Singapore stock market and companies daily report (Singtel, CapitaLand, SC Global Developments)

Singtel’s Australian Unit Undergoes Restructuring
Singapore Telecommunications (Singtel) announced that its Australian unit, Optus, will undergo a major restructure of its business to drive greater efficiencies and give customers a stronger voice. The new structure will create a customer division for managing all aspects of Optus’ relationship with its customers throughout the lifetime of their service, supported by another new marketing and sales division as well as the centralisation of some key functions such as commercial and strategy. The restructuring will also rationalise a number of operational, back office and administrative functions. Hence, Optus will remove a number of areas of duplication, making approximately 750 roles redundant over the coming months with an associated one off charge of approximately A$37 million. Earlier, Singtel had divested its entire stake in Taiwan’s Far EasTone Telecommunications, recording a gain of for $118 million.
Significance: The restructuring will create a more efficient organisation with a renewed focus on Optus’ customers. Furthermore, the improvement in its cost structure will also enhance its competitiveness in its business, placing the company in a stronger position in the market.

CapitaLand’s 1Q12 Net Profit Rises 31.3%
CapitaLand reported a 31.3 percent jump in net profit for 1Q12 to $133.2 million from $101.5 million on the back of a 4.8 percent rise in revenue to $641.1 million from $611.5 million. The strong performance was commendable in spite of volatile economic conditions and was a result of higher portfolio gains and revaluations of its investment properties. Notably, CapitaLand’s overseas operations continued its growth momentum and contributed significantly to earnings before interest and tax, reflecting that the group is on the right track with its market asset strategy. Going forward, Singapore and China will remain as key focus markets for new investments as the company expects the longer term demand to remain healthy despite that both markets are adjusting to the official cooling measures. It will be launching several new projects in Singapore and China.
Significance: Notably, CapitaLand’s on-going capital recycling and prudent capital management initiatives will continue to aim at maintaining a healthy balance sheet. Its net debt equity ratio of 0.36 and a cash balance of $6.0 billion will also offer flexibility in the current volatile climate.

SC Global Developments Expects 1Q12 Results To Sink Into The Red
SC Global Developments (SC Global) forecasts a net loss of approximately $10 million for the first quarter ended 31 March 2012 compared to a net profit of $72.8 million in the previous corresponding period. The sharp decline is attributed to lower sales and revenue recognition from its development projects such as The Marq on Paterson Hill and Hilltops, which did not recognise significant profits. Meanwhile, SC Global pointed out that the new INT FRS 115 accounting standard prevents overseas contributions from being recognised till completion. Thus, SC Global’s subsidiaries, Kairong Developments in China and AVJennings in Australia, can have their contributions shown only upon handover of developments.
Significance: The sentiment in the residential market remained cautious following the latest property measures. Hence, the luxury property market could remain fragile and such sentiment may weigh on SC Global’s top and bottom lines.