Corporate results: Axis REIT, Sunway REIT, F&N and Velesto

Axis REIT to place out units to EPF, KWAP
Axis Real Estate Investment Trust (REIT) is planning to place up to 37.12 million new units or 3% of its stake to the Employees Provident Fund (EPF) and Retirement Fund (Inc) (KWAP). In an exchange filing yesterday, the property trust stated it expects to raise RM63.84 million from the placement, based on the issue price of RM1.72 per unit. The proceeds will be utilised for repaying bank loans. The EPF and KWAP are major shareholders in the trust, owning 14.46% and 11.97% stakes respectively. The proposed placement is expected to be completed by the end of 2019.

Sunway REIT’s 1Q earnings increases 7.96% YoY to RM78.82m
Sunway Real Estate Investment Trust’s (REIT) net profit for the first quarter ended Sept 30, 2019 (1QFY20) increased 7.96% year-on-year (YoY) to RM78.82 million on higher net property income. In an exchange filing yesterday, the property trust noted the profit level was offset by lower interest income, higher manager’s fees and higher finance costs. Quarterly revenue was also up by 8.07% YoY to RM155.35 million.
The REIT’s manager has proposed an interim income distribution of 2.50 sen per unit – comprising taxable and non-taxable amount of 2.04 sen per unit and 0.46 sen per unit respectively – to be paid on Dec 4, 2019. “Taking guidance from the financial performance in 1QFY20, Sunway REIT expects to maintain resilient distribution per unit in FY20, predominantly supported by modest growth in retail segment and full year income contribution from newly acquired Sunway university and college campus,” Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng said.

F&N 4Q net profit falls on higher opex
Fraser & Neave Holdings Bhd’s (F&N) net profit for the fourth quarter ended Sept 30, 2019 (4QFY19) fell 17.69% year-on-year (YoY) to RM68.03 million due to higher operating expenses (opex). Earnings per share for the three months was lower at 18.60 sen compared to 22.60 sen in 4QFY18. Revenue for the period marginally to RM975 million from RM947.64 million a year ago. Net profit for the full year was up 6.13% YoY to RM410.26 million while revenue improved by 5.43% YoY to RM4.08 billion. F&N CEO Lim Yew Hoe expects the domestic market to remain challenging in FY20 with competitive pressures in the canned milk and ready-to-drink beverage segments. He added the group is in preparation to establish a new subsidiary in Dubai to increase and deepen its presence in the Middle East and North Africa region. The board has recommended a final single tier dividend of 33 sen per share for approval by shareholders at its forthcoming AGM.

Velesto bags RM541m jack up drilling rig contract
Velesto Energy Bhd’s wholly-owned subsidiary, Velesto Drilling Sdn Bhd, has received a US$131 million (RM541.17 million) contract from Carigali Hess Operating Company Sdn Bhd for the provision of 10K jack up drilling rig for its 2020 drilling programme. In an exchange filing yesterday, Velesto stated it will assign Naga 8, a premium independent-leg cantilever jack-up rig that has a drilling depth capability of 30,000 feet and has a rated operating water depth of 400 feet, for the job. The contract is expected to commence in the second half of 2020 for a duration of three years with three extension options of six months each.