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Friday, May 14, 2010

YTL sees S'pore as next big market

SINGAPORE: YTL Corp Bhd expects Singapore to be its next big market, said managing director Tan Sri Francis Yeoh.

He said despite the global financial crisis, YTL went ahead to acquire some assets in the island-state in the past two years and these turned out to be highly successful ventures.

In late 2008, YTL bought a slice of Starhill Global REIT which owns 11 prime properties in Singapore, Japan, China and Australia.

Last March, it acquired PowerSeraya Ltd, Singapore's second-largest power generation company.

The dynamism of Asia's economy is very obvious. We believe the region will lead growth in the next 20 to 25 years« TAN SRI FRANCIS YEOH

In real estate, it is developing villas on Singapore's Sandy Island and Kasara in Sentosa Cove, and will redevelop Westwood Apartments on Orchard Boulevard.

Yeoh said the group was keen to tap Asia's growing utilities market, including power generation, water treatment, property and construction, hospitality and communications.

He believes the world's economic epicentre has shifted to the East, with more business opportunities mushrooming in the region.

“The dynamism of Asia's economy is very obvious. We believe the region will lead growth in the next 20 to 25 years,” he told StarBiz over the weekend.

The group, whose core businesses are ownership and management of regulated utilities and other infrastructural assets, derives about 85% of its revenue from abroad.

“We already have an Asian footprint, including shopping centres and a cement plant in China. We also own the second-largest power plant in Indonesia.

“In Singapore, we have PowerSeraya, property projects and Starhill Global REIT.

“China has tremendous opportunities. Even the average person pays cash when buying property,” he said.

To celebrate its successful ventures in Singapore, YTL hosted the Concert of Celebration in the city-state last Saturday.

The free outdoor concert at the Singapore Botanic Gardens saw Italian tenor Andrea Bocelli, renowned flutist Andrea Griminelli, Slovenian soprano Sabina Cvilak and popular Australian singer Delta Goodrem performed for thousands of people.

On whether the weaker pound sterling would affect YTL Power International Bhd's receivables from Wessex Water Ltd, Yeoh said being a diversified international player, there were bound to be earnings translation losses and gains from overseas investments.

YTL Power acquired Wessex Water, a water and sewerage operator in the United Kingdom, in 2002 for £1.24bil.

He said investors should look at the company's long-term operational efficiency and profitability instead of its quarterly performance.

“All our overseas assets operate on their own and having borrowings in their local currencies provide a natural hedge against foreign exchange fluctuations.

“We are very happy with our investment in Wessex and aim to make it the top water and sewerage company in the world,” Yeoh said.

An analyst with a local brokerage said most investors bought into YTL Power for its strong dividend yield.

In the financial year ended June 30, 2009, YTL Power paid 15.75 sen dividend per share, which translated to about 7% gross dividend yield.

For the six months ended Dec 31, 2009, YTL Power's net profit rose 21.7% to RM481.4mil while revenue increased 232.5% to RM6.3bil.

The YTL group has some US$3.5bil cash for its ongoing search of new acquisitions and projects.

Yeoh said whatever the economic cycle, there were opportunities to be seized. “Particularly in an economic downturn, it is a good time for cherry picking.”

By The Star

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