Global Investments

[Boon]

Let's look at the recurring FCF for 1Q2013 result:

Number of shares issued = 851,241,155 after issuance of the latest dividend scrips
FCF require to maintain annual DPU of SGD1.5 cent = SGD 12.8 million per annum or SGD 3.2 million per quarter (on average)

1Q 2013
Ops Cash-flow: SGD 2.848 million
Interest Exp: SGD 0.265 million
Debt Repayment: SGD 0.514 million
Recurring Cash-Flow: SGD 2.069
Dividend shortfall = (SGD 1.131 million), without taking into consideration of cash flow from gain on sale of investments

Add in cash-flow from gain on sale of Asia Listed Equities in 1Q2013 (= SGD 1.43 million) >> enough to cover the quarterly dividend contribution.

That is – still have to rely on gain on sale of investments to fund part of dividend payout – which in the long run is unsustainable. Investors would feel more comfortable and assured if the dividend payout could be fully funded from recurring FCF, without having to rely on contribution from any gain on sale of investments – but this is not happening.

FLY Leasing
I would not read too much into “gain” on sale of FLY shares as those “gain” were measured relative to the impaired net book value of around USD 4.3 per share. (Please refer to page 104, 105 of AR2012)

For FY2012 “gain”, SGD 2.105 million had been “reversed” – {see page 53 of AR2012 – other comprehensive income -Available-for-sale financial assets – reclassifications to profit or loss on disposal (net of income tax)}

Similarly, for 1Q2013 “gain”, there was a “reversal” of SGD 5.375 million (See page 8 of 1Q2013 results – other comprehensive income -Available-for-sale financial assets - Reclassification to profit or loss)

(Vested)