April 2016 Portfolio Update

Stock Name	No of Shares	Current Price	Current Value
Keppel Corp	1000	$5.400	$5,400
Accordia Golf Trust	9000	$0.645	$5,805
NeraTel	5000	$0.640	$3,200
AIMS AMP Capital Industrial Reit	3000	$1.395	$4,185
Cash			$680
Total Value			$19,270

I had added 3000 shares of AIMS AMP Capital Industrial Reit into my portfolio this month. Keppel Corp had recently go into XD on 22nd April, so there is a drop in the portfolio value and the recent recovery of NeraTel and Accordia Golf Trust had increased my portfolio position by 4.3% as compared to last month. Cash on hand had dropped to $680 due to the purchase of AIMS AMP Reit, but I will be looking to increase through the dividend that will be collected in May and June.

This morning, NeraTel had declared that they are in the advanced stage of discussions with a third party regarding the possibility of disposal of the payment solutions business of the Company. Meanwhile there is no binding agreement yet and there is no assurance the transaction will actually proceed. I am still researching on what it is going to happen if the disposal of payment solutions business is to go through. I will either wait for the confirmation of the news from NeraTel or if there is any sudden surge in the price, I may choose to divest it. Let's see how it goes.

MGCCT 4Q DPU up 10.4% at 1.923 cents

Mapletree Greater China Commercial Trust posted their 4Q FY 15/16 earning report in summary below.

•  Available Distribution per Unit (DPU) for 4Q FY 15/16 of 1.923 cents, 10.4% higher than the corresponding quarter a year ago
• FY 15/16 DPU increased 10.8% year on year
• Gross revenue grew 15.2% to $87.8 million
• Net Profit Income (NPI) rose 17.3% to $73 million

The growth in revenue and NPI was mainly due to the acquisition of Sandhill Plaza and steady contribution from Festival Walk and Gateway Plaza. There is rental uplifts of 37% from Festival Walk and 25% from Gateway Plaza. 94% of the portfolio leases due for expiry in FY 15/16 had renewed.

MGCCT have also been consistent growth in Distributable Income and DPU since IPO. Today closing price at 99 cents give you an annualised distribution yield of 7.35% which is very attractive to invest for income.

MGCCT have adopted a prudent risk-based approach to position for further growth. They had created a resilient portfolio that enable high portfolio occupancy and positive rental reversions. Asset management are effective in bringing down the cost management with innovative marketing and promotion. They are always on a lookout for asset enhancement initiatives and make prudent and rigorous acquisition.  

AIMS AMP Capital Industrial Reit 4Q DPU at 2.95 cents

AIMS AMP Capital Industrial Reit posted their 4Q FY 15/16 earning report in summary below.

•  Available Distribution per Unit (DPU) for 4Q FY 15/16 of 2.95 cents, 1% higher than the corresponding quarter a year ago
• Gross revenue and net property income for FY 2016 increased by 7.8% and 2.9% respectively
• Distribution to Unitholders in FY 2016 increased by 4.1% to S$72.1 million
• DPU for FY 2016 of 11.35 cents, 2.5% increase over FY 2015 of 11.07 cents

For the full year to March, revenue rose 7.8% to $124.4 million, with the rental contributions from 20 Gul Way and 103 Defu Lane 10 as they became income producing in 2014, and the higher recoveries from 29 Woodlands Industrial Park E1 and 8 and 10 Pandan Crescent.

AIMS AMP Reit had been consistently paying good dividend over the years as compared to Singapore Government 10 years bond and also CPF. The good leaderships of the management had rewarded the shareholders year after year with increasing DPU returns. If you are looking to invest for income, AIMS AMP Reit is definitely one of the better Reit to invest in.

Keppel Corporation 1Q FY 2016 Report Card

Keppel Corporation posted their 1Q FY 2016 earning report in summary below. 1Q earnings decline 41% to $211 million from $360 million a year ago. Keppel said the higher contribution from its property division at 47% helped to partially offset lower profits from Offshore & Marine. Its Offshore & Marine division delivered three drilling jackups in 1Q, including one unit to Gulf Drilling International at the start of the year. It also delivered a lift boat and a Transformer platform.

• Net Profit fall of 41% for 1Q 2016 to $211 million
• Earnings Per Share was 11.6 cents, down 41% from 1Q 2015's 19.8 cents
• Annualised Return on Equity of 7.1%
• Economic Value Added decreased to $2 million from $122 million
• Cash outflow of $306 million
• Net gearing was 0.56x

Keppel Corporation faces a challenging environment on

• Weaker global growth
• Oil & gas sector remains challenging
• Continued economic and political challenges in Brazil
• Opportunities in Asia underpinned by urbanisation trends

With the challenges ahead in the Oil & gas sector, Keppel earnings will not be recovering soonest during this turmoil period. They had to stay focused on their multi-business strategy and ride on to their improved earnings from other businesses to offset the poor performance of Oil & gas sector. With their financial discipline and resilience built from the Group’s competencies in their chosen core businesses, they will remain poised for new opportunities to deliver sustainable value for their customers and shareholders in the long run.

Recent Action: AIMS AMP Capital Industrial REIT

 

I had added 3000 shares of AIMS AMP Capital Industrial REIT into my portfolio today. With a decent 8% or more of dividend yield yearly, it does make sense for me to add this REIT into my portfolio for income. They were listed in the SGX since 2007 and had been paying strong and regular dividend to it's shareholders since then.

Recently, Standard & Poor's (S&P) has reaffirmed a 'BBB-' investment grade rating with stable outlook for AIMS AMP Capital Industrial REIT. The stable outlook reflects the expectation that AIMS AMP REIT will operate within its financial policy and generate steady cash flow over the next 12 to 24 months.