UNI-ASIA HOLDINGS, despite a challenging shipping market, would have delivered a handsome 9M2015 bottomline if not for fair value losses on its ships.
|Net profit (US$'000) in 9M2015|
(Investment & Asset Management of Vessels & Properties in China/HK)
|Uni-Asia Shipping Ltd
Ship Owning & Chartering
Uni-Asia Capital (Japan) Ltd
Properties in Japan
|Uni-Asia Hotels Ltd
Hotel Operation in Japan
Uni-Asia's total income for 9M2015 rose 12% to US$56 million while operating profit rose 38% to US$6.9 million.
But the shipping market continued to be depressed in 3Q2015, resulting in Uni-Asia having to recognise further fair value losses.
Total fair value losses on its ships for 9M2015: US$3 million (compared to US$484K in 9M2014).
Though non-cash in nature, the fair value loss was big vis-a-vis the operating profit of US$6.9 million.
In fact, the fair value loss on the ships of US$1.61 millon in 3Q dragged the 3Q bottomline (attributable to shareholders) into the red to the tune of US$1.3 million.
As a result, the 9M profit attributable to shareholders was US$2.7 million, down 10% y-o-y.
While the capital values of the ships dropped, and with a sustained market recovery not on the cards in the near-term, their charter income continued to rise -- as the fleet expanded.
Charter income increased by 62% to US$22.5 million in 9M2015, as ship owning subsidiary Uni-Asia Shipping took delivery of 2 new vessels in February 2015 and March 2015, increasing the fleet size of dry bulk carriers owned to 8 as at 30 Sept 2015.
Furthermore, a containership acquired in April 2015 contributed charter income, reflecting the group's strategy of building up recurring charter income.
Property & hotel -- bright spots
Aside from strong charter income, Uni-Asia did well in its property business in Japan. Realised gains on its hotel and property investments amounted to US$1.58 million in 9M2015 while realised gains on small residential property developments stood at US$525K.
There's even more upside next year: While Uni-Asia has only 2 residential projects completed this year, it will have six next year -- starting from Feb 2016 till Aug 2016.
Similarly, next year will also see one more hotel -- the 238-room Hotel Vista Sendai -- starting to contribute to the group when it opens in spring.
Uni-Asia's hotel operations recorded a US$330K net profit in 3Q on higher average room rates, accounting for the bulk of the 9M profit of US$466K.
Uni-Asia stock traded recently at S$1.23, or just 0.3 of the book value of US$2.97 per share.
|"I would also like to comment on our persistent effort in improving corporate governance. The Group has been awarded Runner-Up in SIAS Investors’ Choice Awards – Most Transparent Company 2015, Foreign Listing Category, and our ranking in the NUS Governance and Transparency Index improved over the last three years (from 273 among all listed companies in 2013 to 111 in 2014 and 70 in 2015).
"These endorsements will spur us to work our harder to optimise shareholders’ value, in return for their trust over the years.” -- Michio Tanamoto (photo), executive chairman of Uni-Asia Holdings.
The 3Q2015 Powerpoint materials are here.