UNI-ASIA: Maintains FY2014 dividend at 0.625 cent (4.43% yield)

Brief3.15 @ Uni-Asia Holdings' briefing yesterday (3 March) at its office in AXA Tower in Shenton Way.

MichioTanamoto2.15 Michio Tanamoto, Chairman and CEO of Uni-Asia. Photos by Leong Chan Teik

UNI-ASIA HOLDINGS reported US$2.1 million in net profit for FY14, which was 63% lower y-o-y.

But it maintained its first and final dividend at 0.625 Singapore cent a share (which translates into a 4.43% yield based on yesterday's share price of 14.1 cents).

Given its net asset value of about 39 Singapore cents, the share price trades at a price-book ratio of just 0.36.

Uni-Asia's bottomline was affected by a net fair value loss of US$2.6 million as a result of a poor resale market for containerships.

The unrealised fair value loss pertained to containerships held by a shipping fund which Uni-Asia manages and invests in (it holds a 36.5% stake in the fund).

	Net profit (US$'000) in 2014
Non-consolidated Uni-Asia (Investment & Asset Management of Vessels & Properties in China/HK)	(1,894)
Uni-Asia Shipping Ltd Ship Owning & Chartering	2,223
Uni-Asia Capital (Japan) Ltd Investment & Asset Management of Properties in Japan	1,783
Uni-Asia Hotels Ltd Hotel Operation in Japan	68
Group total	2,108 (-63%)

The fair value loss was offset by investment returns from the partial sale of its Guangzhou office properties and a distressed asset, resulting in a positive investment return of US$2.5 million (versus US$1.1 million in FY2013).

Taken together with a reduced fee income of US$6.0 million, this segment -- Non-consolidated Uni-Asia -- recorded a net loss of US$1.9 million, as reflected in the table on the right.

In its core business of ship owning and chartering, charter income rose 20% to US$19.4 million as an additional ship was chartered out from July 2014.

That brought its ship fleet -- either fully-owned or majority owned -- to six vessels, all of which are bulk carriers.

The operating profit for this segment was US$4.5 million, or US$873,000 lower compared to a year earlier when it had a US$1.7 million one-off forex hedging gain.

Net profit -- under this segment known as Uni-Asia Shipping -- was US$2.2 million.

The prospects for this segment are brightening because in 1Q15, two more new vessels joined the fleet and were immediately chartered out.

In 1Q16, one more vessel will be delivered, expanding the total to 9, and completing the current fleet expansion programme to boost Uni-Asia's recurring income.

Some other takeaways from the briefing:

limkaiching2.15 CFO Lim Kai Ching.» Hotel management: This business had a small profit of US$68,000 last year. The nine hotels under the Vista brand that it manages achieved an occupancy rate of 83.4%, up from 81.7% aided by a weakened yen and a rise in tourists.

Economies of scale are needed to ramp up the profitability, in pursuit of which Uni-Asia is set to manage a new hotel in 2016 and another one in 2017.

That would up the number of rooms under management from the current 1,600 to about 2,100.

Uni-Asia's target is about 3,000 rooms.

» Final dividend: Asked for the rationale of maintaining the dividend at 0.625-cent when the group's profit had fallen, CFO Lim Kai Ching said that the drop in profit arose in part from non-cash fair value losses in the shipping segment.

In addition, the group had an operating cashflow of US$4.8 million, which is sufficient to fund the dividend of SGD2.9 million.

The USD had strengthened vis-a-vis the SGD, resulting in a relatively lower USD amount to be paid for the dividends compared to FY2013.

At SGD1.36/USD, this will be around USD2.1m, compared to around USD2.3m a year ago.

» Share consolidation: Uni-Asia has proposed to consolidate 10 shares into one. This is subject to shareholders' approval at an EGM to be held on the same day as the upcoming AGM.

Asked if the share consolidation would make the share price vulnerable to a sell-down, Uni-Asia Chairman Michio Tanamoto pointed out that the stock is now at a sharp discount to the net asset value of 39 SGD cents.

A sell-down would just make the price-book ratio even more attractive to investors, he said.

For more, see the Powerpoint presentation materials.

UNI-ASIA: Maintains FY2014 dividend at 0.625 cent (4.43% yield)

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