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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Abrdn Asian Income Fund Limited | LSE:AAIF | London | Ordinary Share | GB00B0P6J834 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 208.00 | 203.00 | 209.00 | 0.00 | 08:00:14 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Mgmt Invt Offices, Open-end | -7.19M | -17.07M | -0.1033 | -20.14 | 343.62M |
From Apr 2019 to Apr 2024
TIDMAAIF
RNS Number : 9586N
Aberdeen Asian Income Fund Limited
14 August 2017
ABERDEEN ASIAN INCOME FUND LIMITED
Legal Entity Identifier: 549300U76MLZF5F8MN87
UNAUDITED HALF YEARLY REPORT
FOR THE SIX MONTHSED 30 JUNE 2017
Interim Board Report - Chairman's Statement
Background
Your Company's net asset value ("NAV") returned 10.6% in sterling terms over the six months to 30 June 2017, underperforming the MSCI All Countries Asia Pacific ex Japan Index, which returned 14.1%. The Ordinary share price total return rose by 11.5% whilst the discount to NAV narrowed slightly to 7.6%. A notable development over the period was the stabilisation of growth in the Asian markets, following the volatility seen over the past few years. This has largely been driven by the technology sector, which tends to be characterised by high growth and low yields. The Company retains a balanced view on growth and income, focusing on those companies that boast strong balance sheets and cash flow generation to deliver a blend of sustainable income and capital appreciation.
Overview
Asian equities enjoyed a robust start to the year, shrugging off two US Federal Reserve rate hikes, uncertainty over Trump's stimulus plans, signs of impending monetary policy tightening in Europe and volatile oil prices. Despite Beijing's tightening, China outpaced the region after MSCI decided to add A-shares to its indexes and mainland internet stocks rallied even as the global technology rally faltered. Oil prices fell below US$44 a barrel, owing to record-high US output, though retreating commodity prices kept inflation at bay in Asia, with most central banks keeping interest rates unchanged. Asian investors focused instead on improvements in regional exports and global trade, signs of stabilisation in China and corporate earnings momentum.
Prior to this year, India maintained steady growth but the rest of Asia had faltered on concerns about a potential slowdown in the Chinese economy coupled with both softening consumer sentiment and corporate spending. However, the tides are beginning to turn in 2017, helped by improvements in the regional political environment and a domestic consumer base supported by favourable population demographics in the fast-growing Asian markets. Many of the stocks in your Company's underlying portfolio have been increasing their dividends on an absolute basis, despite this not being fully reflected in yields given the strength in share prices seen this year.
Performance Review
Your Company's NAV rose by 10.6% in sterling terms over the interim period, due to the focus on fundamentally solid businesses with robust balance sheets and good cash flow generation, both of which support your Company's dividend distribution. Against this, the MSCI AC Asia ex Japan index returned 14.1%, significantly skewed by the strength of internet stocks Tencent and Alibaba. These are high-growth companies trading at steep valuations that do not prioritise returning cash to investors, and are thus not held in this income orientated Company.
Whilst your Company does not invest in the Chinese internet stocks that do not pay good dividends, we have exposure to the technology sector via holdings in the hardware, semiconductors and electronics equipment space. Both Taiwan Semiconductor and Samsung Electronics have strong net cash balance sheets and run globally competitive semiconductor businesses which generate high margins and good free cash flows. The top stock contributor to your Company's relative performance this period has been Singapore-listed electronic equipment manufacturer and services provider Venture Corporation. Although a relatively small company with a market capitalisation of GBP2 billion, Venture has nurtured a global business based on its engineering capabilities, providing value-added products and services to a wide range of customers. Through innovation and cost controls, Venture maintains superior margins and good cash flow generation to support its dividend policy.
Stock selection in Singapore was particularly robust, as the three local lenders OCBC, UOB and DBS recovered after reporting better-than-expected results underpinned by higher fee income, better contributions from wealth management and insurance divisions, as well as growth in their regional operations. The improvements were reassuring in light of earlier concerns about deteriorating asset quality.
On the other hand, Australia was the weakest regional market, as low commodity prices and the risk of more bank levies hurt the largest segments of the economy. Both of your Company's diversified miners, Rio Tinto and South32, maintained their production guidance for the year and have relatively solid balance sheets to support their ongoing commitment to dividends. Meanwhile, property stocks were impacted as Australian bond yields tracked global yields higher. Viva Energy REIT suffered after it conducted an equity raising to fund the acquisition of eight new petrol station sites. However, it continues to have good long-term potential, boasting a high-quality tenant portfolio, long lease expiry profile, and a robust balance sheet with limited capital expenditure requirements. This allows it to maintain a healthy distribution policy. Similarly, shopping centre-focused Scentre Group is supported by quality assets, high levels of occupancy and long-term rental agreements.
Portfolio Activity
Turning to portfolio activity, your Manager utilised the Stock Connect trading system to introduce Shanghai-listed SAIC Motor Corporation, which has good product positioning on the mainland and generates substantial cash from its joint ventures with Volkswagen and General Motors. The resulting cash pile on its balance sheet has been used to boost its dividend payout policy, which has kept its yield above 5% despite a 30% increase in share price in local currency. A small position was also initiated in City Developments' non-redeemable convertible preference shares, which offer a 3.9% coupon and trade at a significant discount to intrinsic value with the possibility of conversion into discounted ordinary shares in the future. Your Manager has long followed the parent company and City Development's hospitality trust is already an underlying holding in your Company.
Against this, your Manager reduced exposure to UOB and OCBC on relative strength and exited Thailand's BEC World, on concerns that the company's strategic shift to digital could impact earnings and dividends during the transition. Bonds issued by industrial gases company Yingde were sold close to par at the start of the year, following an unconditional takeover bid from private equity firm PAG. After extensive engagement, your Manager agreed with the Yingde board that valuations based on PAG's cash offer were fair, given the company's current financial status and the challenging environment faced by Yingde's customers, which are primarily in the steel industry.
Dividends
On 11 July 2017, your Board declared a second quarterly interim dividend of 2.25p per Ordinary share in respect of the year ending 31 December 2017, which will be paid on 18 August 2017 to shareholders on the register on 21 July 2017. The first two quarterly dividends, covering the six months to 30 June 2017 therefore total 4.5p (2016 - 4.0p). As indicated at the time of the earlier announcements, the Board is seeking to rebalance the four interim dividends and, in the absence of unforeseen circumstances, it is the Board's intention to declare four interim dividends of 2.25p per Ordinary share totalling 9.0p (2016: 8.75p) in respect of the year to 31 December 2017.
Your Manager took advantage of the volatile environment to add to quality companies at attractive valuations, and trim those that appeared overvalued, whilst improving the yield of the portfolio. Despite the environment, your Company's holdings are expected to maintain steady dividend yields, given their robust operating cash flows.
Gearing and Share Repurchases
On 13 April 2017 the Company entered into a new unsecured three year GBP40 million multi currency revolving facility agreement with Scotiabank (Ireland) Designated Activity Company (the "New Facility") which replaced a GBP30 million unsecured facility that matured at that time. Under the terms of the New Facility the Company also has the option to increase the level of the commitment from GBP40 million to GBP60 million at any time, subject to the identification by the Manager of suitable investment opportunities and Lender credit approval.The Company's total gearing at the period end amounted to the equivalent of GBP36.5 million or net gearing of 6.8% with GBP10m, HKD 213m and USD 7.2m drawn under the Company's facilities with Scotiabank. The Company has not at present used the optional extra commitment but will continue to monitor opportunities in conjunction with the Manager.
Over the first half of the year, the Ordinary shares have continued to trade at a discount to the NAV and the Company has been very active in the market when the discount (excluding income) has exceeded 5% with a view to minimising volatility due to a widening discount. During the period under review, your Company bought in 2,768,000 shares for treasury. Subsequent to the period end a further 470,000 Ordinary shares have been acquired for treasury.
Directorate
As part of the Board's on-going succession planning, Andrey Berzins retired from the Board at the Annual General Meeting ("AGM") held in May 2017 and I would like to reiterate the Board's sincere appreciation to him for his service and significant contribution to the Company since its launch in November 2005. I am pleased to report that Mark Florance has been appointed as an independent non executive Director with effect from 10 May 2017. Mark is a Singapore Permanent Resident and brings to the Board over 25 years' experience in corporate finance, including mergers and acquisitions, equity and debt capital markets and debt restructuring in Asia.
Going forward I intend to retire from the Board at the conclusion of the 2018 AGM and the Nomination Committee is currently overseeing the search for a further non executive Director. With effect from the conclusion of the 2018 AGM Charles Clarke has agreed to become Chairman of the Company.
Aberdeen Merger Update
The Board notes the completion of the merger between Aberdeen and Standard Life. The Board observes that the merger process has not created any issues to date for the Company but we shall continue to ensure that the management team remain focussed upon looking after the interests of the Company and its shareholders during the integration of the two businesses.
Outlook
Asian stockmarkets have made a sharp comeback since their relative sluggishness in the preceding period, buoyed by optimism about a worldwide economic recovery. Chinese demand remains closely watched given the influence on regional trade but there are also concerns about rising financial leverage in China as shadow banking activity shows little sign of abating. Political risks in the region continue to be a wild card while inflation in Asia could pick up if commodities recover.
Nevertheless, there are compelling reasons to remain invested in Asia. Population demographics and a rising middle class offer good potential for long-term growth. Many companies that had delayed capital expenditure on the back of the softened macroeconomic backdrop redirected their cash towards paying down debt obligations and strengthening balance sheets. We are beginning to see a trough in earnings downgrades in Asia and our holdings are starting to see a recovery in earnings. We remain positive for the longer term as Asia's contribution to global nominal GDP far outstrips Asia's representation in the world index, and dividend yield remains higher relative to the Western markets. Your Manager remains committed to achieving a balance between generating income and tapping into growth, by building and maintaining a portfolio of diverse businesses with solid balance sheets, robust fundamentals and the ability to pay sustainable dividends.
I look forward to reporting to you again with the Annual Report for the year to 31 December 2017, which will be issued in April 2018. In the meantime, shareholders can find regular updates from your Investment Manager, and copies of all Stock Exchange announcements on your Company's website asian-income.co.uk. Also on the website there are NAV and share price feeds which are updated on a daily basis.
Peter Arthur
Chairman
14 August 2017
Interim Board Report - Disclosures
Principal Risk Factors
The principal risks and uncertainties affecting the Company are set out in detail on page 10 of the Annual Report and Financial Statements for the year ended 31 December 2016 and have not changed.
The risks outlined below are those risks that the Directors considered at the date of this Half Yearly Report to be material but are not the only risks relating to the Company or its shares. If any of the adverse events described below actually occur, the Company's financial condition, performance and prospects and the price of its shares could be materially adversely affected and shareholders may lose all or part of their investment. Additional risks which were not known to the Directors at the date of this Half Yearly Report, or that the Directors considered at the date of this Report to be immaterial, may also have an effect on the Company's financial condition, performance and prospects and the price of the shares.
If shareholders are in any doubt as to the consequences of their acquiring, holding or disposing of shares in the Company or whether an investment in the Company is suitable for them, they should consult their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Securities and Markets Act 2000 (as amended by the Financial Services Act 2012) or, in the case of prospective investors outside the United Kingdom, another appropriately authorised independent financial adviser.
The risks can be summarised under the following headings:
Investment strategy and objectives;
Investment portfolio, investment management;
Financial obligations;
Financial and regulatory;
Operational; and,
Income and dividend risk.
An explanation of other risks relating to the Company's investment activities, specifically market price, liquidity and credit risk, and a note of how these risks are managed, are contained in note 16 on pages 60 to 67 of the Annual Report for the year ended 31 December 2016.
Going Concern
In accordance with the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued in September 2014, the Directors have undertaken a rigorous review and consider both that there are no material uncertainties and that the adoption of the going concern basis of accounting is appropriate. The Company's assets consist primarily of a diverse portfolio of listed securities which, in most circumstances, are realisable within a very short timescale. Therefore, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Half Yearly Report.
Directors' Responsibility Statement
The Directors are responsible for preparing this Half Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:
- the condensed set of interim financial statements contained within the Half Yearly Financial Report which have been prepared in accordance with IAS 34 "Interim Financial Reporting", give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
- the Half-Yearly Board Report includes a fair review of the information required by rule 4.2.7R of the Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the financial year); and
- the Half-Yearly Board Report includes a fair review of the information required by 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so).
For and on behalf of the Board of Aberdeen Asian Income Fund Limited
Peter Arthur
Chairman
14 August 2017
Condensed Statement of Comprehensive Income
Hot Features
Premium
Six months ended Six months ended Year ended
30 June 2017 30 June 2016 31 December
2016
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
income
Dividend
income 10,599 - 10,599 9,657 - 9,657 18,203 - 18,203
Interest
income 873 - 873 1,499 - 1,499 2,744 - 2,744
Total revenue 11,472 - 11,472 11,156 - 11,156 20,947 - 20,947
Gains on
investments
held at
fair value
through
profit or
loss - 31,371 31,371 - 47,313 47,313 - 83,483 83,483
Net currency
gains/(losses) - 1,397 1,397 - (3,047) (3,047) - (5,596) (5,596)
______ ______ ______ ______ ______ ______ ______ ______ ______
11,472 32,768 44,240 11,156 44,266 55,422 20,947 77,887 98,834
______ ______ ______ ______ ______ ______ ______ ______ ______
Expenses
Investment
management
fee (note
10) (692) (1,039) (1,731) (646) (970) (1,616) (1,308) (1,962) (3,270)
Other operating
expenses
(note 5) (541) - (541) (523) - (523) (1,049) - (1,049)
______ ______ ______ ______ ______ ______ ______ ______ ______
Total operating
expenses (1,233) (1,039) (2,272) (1,169) (970) (2,139) (2,357) (1,962) (4,319)
______ ______ ______ ______ ______ ______ ______ ______ ______
Profit before
finance
costs and
taxation 10,239 31,729 41,968 9,987 43,296 53,283 18,590 75,925 94,515
Finance
costs (142) (212) (354) (118) (177) (295) (238) (358) (596)
______ ______ ______ ______ ______ ______ ______ ______ ______
Profit before
tax 10,097 31,517 41,614 9,869 43,119 52,988 18,352 75,567 93,919
Tax expense (670) - (670) (548) - (548) (1,045) - (1,045)
______ ______ ______ ______ ______ ______ ______ ______ ______
Profit for
the period
(note 3) 9,427 31,517 40,944 9,321 43,119 52,440 17,307 75,567 92,874
______ ______ ______ ______ ______ ______ ______ ______ ______
Earnings
per Ordinary
share (pence)
(note 3) 5.08 16.97 22.05 4.90 22.66 27.56 9.15 39.97 49.12
The Company does not have any income or expense that
is not included in profit/(loss) for the period, and
therefore the "Profit/(loss) for the period" is also
the "Total comprehensive income for the period".
The total columns of this statement represent the
Condensed Statement of Comprehensive Income, prepared
in accordance with IFRS. The revenue and capital columns
are supplementary to this and are prepared under guidance
published by the Association of Investment Companies.
All items in the above statement derive from continuing
operations.
All of the profit/(loss) and total comprehensive income
is attributable to the equity holders of Aberdeen
Asian Income Fund Limited. There are no non-controlling
interests.
Condensed Balance Sheet
As at As at As at
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Investments held at fair
value through profit
or loss 449,432 398,415 428,908
______ ______ ______
Current assets
Cash and cash equivalents 7,986 6,193 5,314
Other receivables 1,759 2,206 1,440
______ ______ ______
9,745 8,399 6,754
______ ______ ______
Creditors: amounts falling
due within one year
Bank loans 8 (36,467) (29,154) (27,974)
Other payables (846) (801) (1,660)
______ ______ ______
(37,313) (29,955) (29,634)
______ ______ ______
Net current liabilities (27,568) (21,556) (22,880)
Creditors: amounts falling
due after more than one year
Bank loan 8 - (10,000) (10,000)
______ ______ ______
Net assets 421,864 366,859 396,028
______ ______ ______
Stated capital and reserves
Stated capital 9 194,933 194,933 194,933
Capital redemption reserve 1,560 1,560 1,560
Capital reserve 210,765 156,339 185,050
Revenue reserve 14,606 14,027 14,485
______ ______ ______
Equity shareholders'
funds 421,864 366,859 396,028
______ ______ ______
Net asset value per Ordinary
share (pence) 4 229.02 194.19 211.82
Condensed Statement of Changes in Equity
Six months ended 30
June 2017 (unaudited)
Capital
Stated redemption Capital Revenue Retained
capital reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance 194,933 1,560 185,050 14,485 - 396,028
Buyback of Ordinary
shares for holding
in treasury - - (5,802) - - (5,802)
Profit for the period - - - - 40,944 40,944
Transferred to retained
earnings from capital
reserve{A} - - 31,517 - (31,517) -
Transferred from retained
earnings to revenue
reserve - - - 9,427 (9,427) -
Dividends paid (note
6) - - - (9,306) - (9,306)
______ ______ ______ ______ ______ ______
Balance at 30 June
2017 194,933 1,560 210,765 14,606 - 421,864
______ ______ ______ ______ ______ ______
Six months ended 30
June 2016 (unaudited)
Capital
Stated redemption Capital Revenue Retained
capital reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance 194,933 1,560 119,637 13,302 - 329,432
Buyback of Ordinary
shares for holding
in treasury - - (6,417) - - (6,417)
Profit for the period - - - - 52,440 52,440
Transferred to retained
earnings from capital
reserve{A} - - 43,119 - (43,119) -
Transferred from retained
earnings to revenue
reserve - - - 9,321 (9,321) -
Dividends paid (note
6) - - - (8,596) - (8,596)
______ ______ ______ ______ ______ ______
Balance at 30 June
2016 194,933 1,560 156,339 14,027 - 366,859
______ ______ ______ ______ ______ ______
Year ended 31 December
2016 (audited)
Capital
Stated redemption Capital Revenue Retained
capital reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance 194,933 1,560 119,637 13,302 - 329,432
Buyback of Ordinary
shares for holding
in treasury - - (10,154) - - (10,154)
Profit for the year - - - - 92,874 92,874
Transferred from retained
earnings to capital
reserve{A} - - 75,567 - (75,567) -
Transferred from retained
earnings to revenue
reserve - - - 17,307 (17,307) -
Dividends paid (note
6) - - - (16,124) - (16,124)
______ ______ ______ ______ ______ ______
Balance at 31 December
2016 194,933 1,560 185,050 14,485 - 396,028
______ ______ ______ ______ ______ ______
{A} Represents the capital profit attributable to
equity shareholders per the Condensed Statement of
Comprehensive Income.
The revenue reserve represents the amount of the Company's
reserves distributable by way of dividend.
The stated capital in accordance with Companies (Jersey)
Law 1991 Article 39A is GBP260,822,000 (30 June 2016
- GBP260,822,000; 31 December 2016 - GBP260,822,000).
These amounts include proceeds arising from the issue
of shares by the Company but excludes the cost of
shares purchased for cancellation or treasury by the
Company.
Condensed Cash Flow Statement
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Dividend income received 9,081 8,207 16,996
Interest income received 958 1,634 2,881
Investment management
fee paid (2,544) (1,343) (2,433)
Other cash expenses (631) (506) (954)
______ ______ ______
Interest paid (371) (327) (592)
Overseas taxation paid (670) (548) (1,045)
______ ______ ______
Net cash inflows from
operating activities 5,823 7,117 14,853
Cash flows from investing
activities
Purchases of investments (25,426) (21,817) (56,400)
Sales of investments 37,500 29,362 70,158
______ ______ ______
Net cash inflow/(outflow)
from investing activities 12,074 7,545 13,758
Cash flows from financing
activities
Purchase of own shares
for treasury (5,809) (6,631) (10,203)
Dividends paid (9,306) (8,596) (16,124)
Loans repaid - (3,391) (6,773)
______ ______ ______
Net cash outflow from
financing activities (15,115) (18,618) (33,100)
______ ______ ______
Net increase/(decrease)
in cash and cash equivalents 2,782 (3,956) (4,489)
Cash and cash equivalents
at the start of the
period 5,314 10,504 10,504
Foreign exchange (110) (355) (701)
______ ______ ______
Cash and cash equivalents
at the end of the period 7,986 6,193 5,314
______ ______ ______
Notes to the Financial Statements
For the period ended 30 June 2017
1. Accounting policies - basis of preparation
The Annual Report is prepared in accordance with
International Financial Reporting Standards (IFRS),
as issued by the International Accounting Standards
Board (IASB), and interpretations issued by the
International Financial Reporting Interpretations
Committee of the IASB (IFRIC). The condensed Half
Yearly Report has been prepared in accordance with
International Accounting Standards (IAS) 34 - 'Interim
Financial Reporting'. It has also been prepared
using the same accounting policies applied in the
annual report for the year ended 31 December 2016.
The financial statements have been prepared on
a going concern basis. In accordance with the Financial
Reporting Council's guidance on 'Going Concern
and Liquidity Risk' the Directors have undertaken
a review of the Company's assets and liabilities.
The Company's assets primarily consist of a diverse
portfolio of listed equity shares which, in most
circumstances, are realisable within a very short
timescale.
During the period the following amendments to standards
became effective:
* IAS 7 - Disclosure Initiative (effective for annual
periods beginning on or after 1 January 2017)
* IAS 12 - Recognition of Deferred Tax Assets for
Unrealised Losses (effective for annual periods
beginning on or after 1 January 2017)
* IFRS 12 (AI 2014-16) - Clarification of the scope of
the Standard (effective for annual periods beginning
on or after 1 January 2017)
The adoption of the above amendments to standards
did not have a significant impact on this condensed
set of interim financial statements. The amendment
to IAS 7 requires additional disclosures. Any changes
in disclosure considered necessary will be made
in the annual financial statements.
The Board considers that there will be no material
impact arising from a fundamental rewrite of accounting
rules for financial instruments under IFRS 9 Financial
Instruments (effective for annual periods beginning
on or after 1 January 2018) which introduces a
new classification model for financial assets that
is more principles-based than the current requirements
under IAS 39 Financial Instruments: Recognition
and Measurement. More details relating to this
assessment are contained within last year's annual
report.
2. Segmental information
For management purposes, the Company is organised
into one main operating segment, which invests
in equity securities and debt instruments. All
of the Company's activities are interrelated, and
each activity is dependent on the others. Accordingly,
all significant operating decisions are based upon
analysis of the Company as one segment. The financial
results from this segment are equivalent to the
financial statements of the Company as a whole.
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
3. Earnings per Ordinary p p p
share
Revenue return 5.08 4.90 9.15
Capital return 16.97 22.66 39.97
______ ______ ______
Total return 22.05 27.56 49.12
______ ______ ______
The figures above
are based on the following:
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue return 9,427 9,321 17,307
Capital return 31,517 43,119 75,567
______ ______ ______
Total return 40,944 52,440 92,874
______ ______ ______
Weighted average number
of Ordinary shares
in issue 185,721,295 190,286,312 189,072,288
__________ __________ __________
4. Net asset value per share
Ordinary shares
The basic net asset value per Ordinary share and
the net asset values attributable to Ordinary shareholders
at the period end calculated in accordance with
the Articles of Association were as follows:
As at As at As at
30 June 30 June 31 December
2017 2016 2016
Basic (unaudited) (unaudited) (audited)
Attributable net assets
(GBP'000) 421,864 366,859 396,028
Number of Ordinary
shares in issue (excluding
shares in issue held
in treasury) 184,200,389 188,913,389 186,968,389
Net asset value per
Ordinary share (p) 229.02 194.19 211.82
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
5. Other operating expenses GBP'000 GBP'000 GBP'000
(revenue)
Directors' fees 85 80 165
Secretarial and administration
fees 67 67 134
Promotional activities 125 125 250
Auditor's remuneration:
- statutory audit 17 29 39
- interim accounts
review 6 6 6
- tax services 3 - 11
Custodian charges 89 70 155
Other 149 146 289
______ ______ ______
541 523 1,049
______ ______ ______
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
6. Dividends on equity GBP'000 GBP'000 GBP'000
shares
Amounts recognised
as distributions to
equity holders in
the period:
Second interim dividend
for 2016 - 2.00p - - 3,771
Third interim dividend
for 2016 - 2.00p - - 3,757
Fourth interim dividend
for 2016 - 2.75p (2015
- 2.50p) 5,136 4,812 4,812
First interim dividend
for 2017 - 2.25p (2016
- 2.00p) 4,170 3,784 3,784
______ ______ ______
9,306 8,596 16,124
______ ______ ______
A second interim dividend of 2.25p for the year
to 31 December 2017 will be paid on 18 August 2017
to shareholders on the register on 21 July 2017.
The ex-dividend date was 20 July 2017.
The following data has been used in calculating
the total returns on net asset value and share
price:
Ex-div date Rate (p) NAV (p) Share price
(p)
19 January 2017 2.75 216.85 204.00
27 April 2017 2.25 222.29 208.25
______ ______ ______
Ex-div date Rate (p) NAV (p) Share price
(p)
21 January 2016 2.50 157.18 140.50
______ ______ ______
21 April 2016 2.00 186.39 171.88
______ ______ ______
21 July 2016 2.00 205.60 187.00
20 October 2016 2.00 218.61 206.00
7. Transaction costs
During the period expenses were incurred in acquiring
or disposing of investments classified as fair
value through profit or loss. These have been expensed
through capital and are included within gains/(losses)
on financial assets at fair value through profit
or loss in the Condensed Statement of Comprehensive
Income. The total costs were as follows:
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Purchases 35 23 49
Sales 37 33 64
______ ______ ______
72 56 113
______ ______ ______
8. Bank loans
In April 2017, the Company entered into a new unsecured
three year GBP40 million multi-currency facility
agreement with Scotiabank (Ireland) Limited which
replaced a GBP30 million secured facility. At the
period end approximately USD 7.2 million and HKD
213 million, equivalent to GBP26.4 million was
drawn down from the GBP40 million facility. The
interest rates attributed to the USD and HKD loans
at the period end were 2.077% and 1.319% respectively.
In March 2015, the Company entered into a new fixed
three year GBP10 million credit facility with Scotiabank
Europe PLC at an all-in interest rate of 2.2175%
which will mature on 2 March 2018.
At the period end, bank loans totalled GBP36,467,000
(30 June 2016 - GBP39,154,000; 31 December 2016
- GBP37,974,000).
30 June 2017 30 June 2016 31 December
2016
9. Stated capital Number GBP'000 Number GBP'000 Number GBP'000
Ordinary shares
of no par
value
Authorised Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited
Issued and
fully paid 194,933,389 194,933 194,933,389 194,933 194,933,389 194,933
No Ordinary shares were issued or bought back for
cancellation during the period (six months ended
30 June 2016 and year ended 31 December 2016 -
same).
During the period 2,768,000 Ordinary shares were
bought back by the Company for holding in treasury
at a cost of GBP5,802,000 (30 June 2016 - 4,213,000
shares were bought back at a cost of GBP6,417,000;
31 December 2016 - 6,158,000 shares were bought
back for holding in treasury at a cost of GBP10,154,000).
As at 30 June 2017 10,733,000 (30 June 2016 - 6,020,000;
31 December 2016 - 7,965,000) Ordinary shares were
held in treasury.
The Ordinary shares give shareholders the entitlement
to all of the capital growth in the Company's assets
and to all the income from the Company that is
resolved to be distributed.
10. Related party disclosures and transactions with
the Manager
Transactions with the Manager
Mr H Young is a director of Aberdeen Asset Management
PLC ("AAM") and its subsidiary Aberdeen Asset Management
Asia Limited ("AAM Asia"). Aberdeen Private Wealth
Management Limited ('APWM') is also a subsidiary
of AAM and it has an agreement to provide management
services to the Company, which it has sub-delegated
to AAM Asia. APWM has an agreement to provide company
secretarial and administration and promotional
activity services to the Company.
The management fee is payable quarterly in arrears,
based on an annual amount of 0.85% of the net asset
value of the Company valued monthly and on the
average of the previous five monthly valuation
points. During the period GBP1,731,000 (30 June
2016 - GBP1,616,000; 31 December 2016 - GBP3,270,000)
of management fees were paid and payable, with
a balance of GBP295,000 (one month's fee) (30 June
2016 - GBP544,000 (two months' fees); 31 December
2016 - GBP1,108,000 (four months' fees)) being
payable to AAM Asia at the period end.
The company secretarial and administration fee
is GBP134,000 (30 June 2016 - GBP134,000; 31 December
2016 - GBP134,000), payable quarterly in arrears.
During the period GBP67,000 (30 June 2016 - GBP67,000;
31 December 2016 - GBP134,000) of fees were paid
and payable, with a balance of GBP33,000 (30 June
2016 - GBP33,000; 31 December 2016 - GBP101,000)
being payable to APWM at the period end.
The promotional activities fee is based on a current
annual amount of GBP250,000 (30 June 2016 - GBP250,000;
31 December 2016 - GBP250,000), payable quarterly
in arrears. During the period GBP125,000 (30 June
2016 - GBP125,000; 31 December 2016 - GBP250,000)
of fees were payable, with a balance of GBP63,000
(30 June 2016 - GBP63,000; 31 December 2016 - GBP63,000)
being payable to APWML at the period end.
11. Fair value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity
to classify fair value measurements using a fair
value hierarchy that reflects the significance
of the inputs used in making measurements. The
fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities;
Level 2: inputs other than quoted prices included
within Level 1 that are observable for the assets
or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that
are not based on observable market data (unobservable
inputs).
The financial assets and liabilities measured at
fair value in the Condensed Balance Sheet are grouped
into the fair value hierarchy as follows:
Level Level Level Total
1 2 3
At 30 June 2017 (unaudited) Note GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
at fair value through
profit or loss
Quoted equities a) 436,146 - - 436,146
Quoted bonds b) - 13,286 - 13,286
______ ______ ______ ______
Total assets 436,146 13,286 - 449,432
______ ______ ______ ______
Level Level Level Total
1 2 3
At 30 June 2016 (unaudited) Note GBP'000 GBP'000 GBP'000 GBP'000
Financial assets
at fair value through
profit or loss
Quoted equities a) 375,972 - - 375,972
Quoted bonds b) - 22,443 - 22,443
______ ______ ______ ______
Total assets 375,972 22,443 - 398,415
______ ______ ______ ______
Level Level Level Total
1 2 3
At 31 December 2016 Note GBP'000 GBP'000 GBP'000 GBP'000
(audited)
Financial assets
at fair value through
profit or loss
Quoted equities a) 405,449 - - 405,449
Quoted bonds b) - 23,459 - 23,459
______ ______ ______ ______
Total assets 405,449 23,459 - 428,908
______ ______ ______ ______
a) Quoted equities
The fair value of the Company's investments in
quoted equities has been determined by reference
to their quoted bid prices at the reporting date.
Quoted equities included in Fair Value Level 1
are actively traded on recognised stock exchanges.
b) Quoted bonds
The fair value of the Company's investments in
quoted bonds has been determined by reference to
their quoted bid prices at the reporting date.
Investments in quoted bonds are not considered
to trade in active markets and accordingly the
Company's holding in quoted bonds as at 30 June
2016 has been reclassified from Level 1 to Level
2.
Fair values of financial liabilities
The fair value of the loan is determined by aggregating
the expected future cash flows for the loan discounted
at a rate comprising the borrower's margin plus
an average of market rates applicable to loans
of a similar period of time and currency.
The fair value of borrowings as at 30 June 2017
has been estimated at GBP36,467,000. At 30 June
2016 and 31 December 2016 the fair value was GBP39,216,000
and GBP38,033,000 respectively which was the same
as the carrying values due to the short-term nature
of the loans. Under the fair value hierarchy in
accordance with IFRS 13, these borrowings are classified
as Level 2.
12. Events after the reporting period
A further 470,000 Ordinary shares have been bought
back by the Company for holding in treasury, subsequent
to the reporting period end, at a cost of GBP1,004,000.
Following the share buybacks there were 183,730,389
Ordinary shares in issue.
13. Half Yearly Financial Report
The financial information for the six months ended
30 June 2017 and 30 June 2016 has not been audited.
14. Approval
This Half Yearly Financial Report was approved
by the Board on 14 August 2017.
The Half Year Report will be posted to shareholders in late August 2017 and copies will be available on the Company's website (asian-income.co.uk*) or in hard copy format from the Company's registered office, Sir Walter Raleigh House, 48 - 50 Esplanade, St Helier, Jersey JE2 3QB.
*Neither the Company's website nor the content of any website accessible from hyperlinks on that website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement
Aberdeen Private Wealth Management Limited
Company Secretary
14 August 2017
Independent Review Report to Aberdeen Asian Income Fund Limited
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2017 which comprises the Condensed Statement of Comprehensive Income, the Condensed Balance Sheet, the Condensed Statement of Changes in Equity, the Condensed Cash Flow Statement and the related explanatory notes 1 to 14. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRS). The condensed set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Jersey
Channel Islands
14 August 2017
The maintenance and integrity of the Aberdeen Asian Income Fund Limited website is the responsibility of the Directors; the work carried out by the Auditor does not include consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes that may have occurred to the financial information since it was initially presented on the website.
Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Investment Portfolio
As at 30 June 2017
Valuation Total
assets
Company Country of GBP'000 %
activity
HSBC Holdings Hong Kong 16,843 3.7%
Taiwan Semiconductor Manufacturing Taiwan 16,253 3.6%
Venture Corporation Singapore 15,631 3.4%
Singapore Telecommunciations Singapore 14,790 3.2%
Oversea-Chinese Banking Corporation Singapore 14,505 3.2%
Jardine Cycle & Carriage Singapore 13,804 3.0%
Taiwan Mobile Taiwan 12,548 2.7%
Hana Microelectronics Thailand 12,453 2.7%
Spark New Zealand New Zealand 11,952 2.6%
Singapore Technologies Engineering Singapore 11,728 2.6%
Top ten investments 140,507 30.7%
Ausnet Services Australia 11,536 2.5%
Commonwealth Bank of Australia Australia 11,507 2.5%
Heineken Malaysia Malaysia 11,476 2.5%
Tesco Lotus Retail Growth Thailand 11,248 2.5%
China Mobile China 11,194 2.4%
DBS Group Singapore 10,576 2.3%
Samsung Electronics South Korea 10,273 2.2%
Australia & New Zealand Bank
Group Australia 9,291 2.0%
Swire Pacific (Class A and
Class B shares) Hong Kong 8,985 2.0%
Hang Lung Properties Hong Kong 8,385 1.9%
Top twenty investments 244,978 53.5%
Scentre Group Australia 8,260 1.8%
Yum China Holdings China 8,196 1.8%
Electricity Generating Thailand 8,158 1.8%
Amada Holdings Japan 8,119 1.8%
Advanced Information Services Thailand 8,001 1.7%
Telstra Australia 7,770 1.7%
Viva Energy REIT Australia 7,641 1.6%
Westpac Banking Corporation Australia 7,474 1.6%
United Overseas Bank Singapore 7,394 1.6%
SAIC Motor Corp China 7,163 1.6%
Top thirty investments 323,154 70.5%
CDL Hospitality Trust Singapore 7,081 1.6%
Far East Hospitality Trust Singapore 6,988 1.5%
Shopping Centres Australasia Australia 6,955 1.5%
Siam Cement{B} Thailand 6,927 1.5%
Giordano International Hong Kong 6,881 1.5%
Japan Tobacco Japan 6,877 1.5%
Rio Tinto{C} Australia 6,808 1.5%
Keppel REIT Singapore 6,581 1.4%
Standard Chartered United Kingdom 6,161 1.4%
British American Tobacco
Malaysia Malaysia 5,602 1.2%
Top forty investments 390,015 85.1%
Indo Tambangraya Megah Indonesia 5,546 1.2%
Okinawa Cellular Telephone Japan 5,319 1.2%
South32{C} Australia 4,851 1.1%
Green Dragon Gas{A} China 4,777 1.0%
Star Media Malaysia 4,642 1.0%
ASX Australia 4,569 1.0%
ICICI Bank{A} India 4,565 1.0%
Hong Leong Finance Singapore 4,514 1.0%
Texwinca Holdings Hong Kong 4,365 0.9%
Kingmaker Footwear Hong Kong 4,235 0.9%
Top fifty investments 437,398 95.4%
Westfield Corporation Australia 4,007 0.9%
DFCC Bank{A} Sri Lanka 3,944 0.9%
Lafarge Malaysia Malaysia 3,656 0.8%
City Developments Singapore 300 0.1%
AEON Credit Service Malaysia 127 -
Total investments 449,432 98.1%
Other net assets{D} 8,899 1.9%
Total assets 458,331 100.0%
{A} Corporate bonds.
{B} Holding includes investment in common and non-voting
depositary receipt lines.
{C} Incorporated in and listing held in United Kingdom.
{D} Excludes bank loans of GBP36,467,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BUGDIUGBBGRS
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August 14, 2017 11:11 ET (15:11 GMT)
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