Alternative investment company Uni-Asia has declared an interim dividend of 6.5 cents per share for its 1HFY2022 results ended June.
The dividend is 225% higher compared to the same period a year before, and is the highest interim dividend paid out since its inception.
This comes on the back of a record set of results for the company, with Uni-Asia announcing a revenue of US$48.9 million ($66.9 million), a 54% increase y-o-y. Consequently, profit after tax came in 134% higher at US$16.5 million, compared to just US$7 million in 1HFY2021.
Uni-Asia explained that the increase in revenue was driven by improved charter income, fee income and the sale of two properties under development.
In its charter income segment, Uni-Asia recorded US$34 million in charter income, up 70% from US$20 million in 1HFY2021.
It noted that the Baltic Handysize Index (BHSI) -which is a measure of the strength of spot freight earnings for smaller dry bulk vessels - continues its growth momentum and averaged at 1,432 for 1HFY2022, compared to 1,084 for 1HFY2021.
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The average daily charter rate for its 10 consolidated dry bulk carriers also increased to US$19,411 for 1HFY2022, significantly higher than US$10,864 in 1HFY2021.
As for its fee incomes, this increased by 45% yoy to US$4.2 million in 1HFY2022. Specifically, its revenue for its recurring asset management fee increased slightly by 3%.
Arrangement and agency fees increased, following the receipt of ship-related arrangement fees from a deal closed in 1HFY2022 and arrangement fee increments relating to assets managed in Japan.
Brokerage commissions increased as well, driven by the increase in ship brokerage commissions linked to charter rates and the increase in property related brokerage deals in Japan.
US$9.2 million was also recorded following the sale of two properties under development, an 81% y-o-y increase in total proceeds.
In addition to its operations, Uni-Asia also recorded investment returns of US$1.1 million for 1HFY2022.
Realised gains include US$0.6 million from small residential property development projects and US$0.1 million from ship investments, while property rental income came in at US$0.4 million for 1HFY2022.
Total net fair valuation gain from its shipping, property and other investments were US$0.1 million for 1HFY2022.
Moving forward, Uni-Asia says that while the current dry bulk market is favourable to the company’s charter business, four of its ten wholly-owned dry bulk carriers are scheduled for dry-docking in 2HFY2022, with a total of around 110 off-hire days being budgeted.
As such, it warns that total charter income for 2HFY2022 may be lower than that of 1HFY2022 should 2HFY2022’s charter rates remain at the same level as that for 1HFY2022.
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For its properties, it points out that Hong Kong’s commercial office and industrial property market remained sluggish due to the Covid-19 pandemic, adding that many sellers and buyers are cautious about entering into transactions during this period of uncertainties.
As such, current transactional figures may not reflect the true market appetite for Hong Kong commercial office/industrial properties, and the company thinks that the market may be more active after the border controls are relaxed.
Over in Japan, Uni-Asia notes that the Bank of Japan (BOJ) would continue to maintain ultra-low interest rates and signalled its resolve to remain an outlier in a wave of global central banks' policy tightening, despite projecting that Japan’s inflation would exceed the BOJ’s target in 2022, BOJ
As a result, the Japanese yen continues to weaken against the US dollar, and these factors contributed to more foreign investors looking for good investment opportunities in Japan, including Japan’s property market.
Uni-Asia’s small residential property projects, and other property businesses, including its property asset management business would benefit from a more buoyant Japan property market and a low interest rate environment in Japan.
Shares of Uni Asia closed flat on Aug 12 at $1.08
