Singapore stock preview: Sembcorp Marine, SATS, MLT

• SembCorp Marine Ltd share price falls 2.5% to S$0.12 on Monday (12 July 2021), after it guided for 1H 2021 losses to be close to FY2020’s full-year losses
• SATS Ltd share price is down 0.5%, following the completion of a S$21 million acquisition of Thai food production facility Food Empire
• Mapletree Logistics Trust has been granted an option to purchase 9 Changi South Street 2 for a consideration amount of S$24.5 million
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Sembcorp Marine (SGX: S51)

Sembcorp Marine expects losses for 1H 2021 to be in the region of the full year losses incurred for FY2020, the group said in its latest profit guidance for the half year ended 30 June 2021.

This is due to provisions made for increased costs associated with the group’s ongoing projects in FY2021 and FY2022.

The group explained that most of its projects have been delayed by at least 12 months since the onset of the Covid-19 pandemic in 1Q 2020.

In order to complete the projects, it has been actively recruiting additional skilled labour from non-traditional sources, which cost more than twice of traditional employment on average.

Consequently, the group says that it will make provisions in its 1H 2021 results for ‘these significant additional manpower costs to be incurred over the next six to 18 months’.

Sembcorp Marine shares are down 2.44% as at 13:30 SGT on Monday.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust Management Ltd., the manager of Mapletree Logistics Trust (MLT), announced on Friday (09 July 2021) that it has been granted an option to acquire 9 Changi South Street 2 in Singapore from RSH Holdings Pte Ltd for a purchase price of S$24.5 million.

If the option is exercised, MLT is expected to incur an estimated total transaction cost of approximately S$2.7 million.

The proposed acquisition, expected to generate a stabilised property income yield of approximately 6.2%, will be funded by debt and is expected to be completed by 3Q FY21/22, subject to approval from JTC Corporation.

Upon completion, MLT’s aggregate leverage ratio will be approximately 38.5%, while MLT’s total portfolio will comprise 164 properties with total assets under management of S$10.8 billion.

SATS (SGX: S58)

SATS announced last Friday that it has completed an acquisition of 85% of the shares in the capital of Food City Company Limited for an amount of roughly S$21 million.

Food City is now a subsidiary of the company through its subsidiaries, SATS Thailand and SIPL.

Bangkok Ranch PLC (Bangkok Ranch), the existing owner of Food City, will retain the remaining 15%.

Food City’s main asset is the Pathumthani food production facility, set up in 2016. Following the acquisition, the facility will be configured to produce 90,000 ready-to-eat meals per day.

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