Bumitama Makes Sparkling Debut
Indonesian palm oil producer, Bumitama Agri opened at $1.005, representing a 34.9 percent above its initial public offering (IPO) price of $0.745 on its debut on the Singapore Exchange today. Bumitama’s institutional and public offering of 172.7 million shares was 30.8-times subscribed. A 29.8 million share overallotment option was also allocated to the placement. Further indicating that the appetite for soft commodities companies out of Indonesia remains strong despite uncertainties about the global economy, the commodities company is also priced at the top of its $0.675-$0.745 indicative price range. Bumitama has raised $243.9 million in its IPO, which will be used for capital expenditure purposes and to expand new plantations on uncultivated land.
Significance: Bumitama is expected to benefit from the positive CPO-price outlook amid expectations for a poor South American soybean harvest and indications US farmers are planting fewer soybean acres. Furthermore, analysts note that Bumitama’s young age profiles for its trees will provide a boost to its bottomline.
Genting Singapore To Pursue More Acquisitions On Its Huge Cash Pile
Casino operator Genting Singapore is likely to pursue gaming acquisitions over greenfield investments after piling up cash in recent fundraising efforts, according to Macquarie. Notably, Australia’s Echo Entertainment (Echo) is also an attractive target. The house pointed out that “most regional targets have large founding shareholders, with Echo being the only company that has one of the most open shareholder registers following its recent demerger from Tabcorp and an asset base which could likely be of interest to Genting”. Furthermore, Genting has previously sought licenses in the cities Echo operates in. The house believes Genting can fund an acquisition of Echo, a move likely to be highly earnings-accretive, without raising equity, and still be able to take opportunities in Japan and Korea when they arise.
Significance: Macquarie highlighted that an acquisition of Echo would help Genting to build a regional footprint and gain access to a gaming concession in a gateway city, Sydney and the Gold Coast, which are popular destinations for Asian travellers.
Technics Reports 60% Jump In 1H12 Profit
Leading full service integrator of compression systems and process modules, Technics Oil and Gas reported a 60 percent year-on-year growth in net profit to $12.5 million for the six months ended 31 March 2012. This leap in earnings was on the back of a 48 percent year-on-year jump in revenue to $85.1 million. The company attributed the growth to higher revenue contributions from its businesses despite a decline in gross profit margin due to more Contract Engineering projects, which command lower margins. Currently, Technics has an outstanding order book of approximately $95.5 million and this will be progressively delivered through to 1H13. Coupled with its current yard schedules and the expected completion of its expanded yard space and new inhouse facilities in early next year, the company is anticipating a better performance for FY12.
Significance: Despite the volatility in oil prices, the company’s quality cliente, who hold long term views on operational requirements with committed capital expenditure in place as well as the healthy demands for its products and services, will help sustain the order winning momentum.