STX OSV Secures Largest Single Contract Since Listing
STX OSV Holdings, a leading designer and shipbuilder of offshore and specialised vessels announced on 14 June 2012 after trading hours that it had won its largest single contract worth NOK1.4 billion (approximately $301.1 million). The contract entails the design and construction of a large, advanced Offshore Subsea Construction Vessel (OSCV) for Ocean Installer and Solstad Offshore. STX OSV expects make delivery of the vessel by 2Q14. However, the contract is still subject to board approval by the Norwegian Guarantee Institute for Export Credits which is expected to be received on or around 20 June 2012. The vessel is highly advanced in terms of station keeping, efficiency and operational performance is designed to operate under demanding conditions and is well fitted for Subsea, Umbilicals, Risers and Flowlines operations. Separately, STX OSV has also signed a letter of intent for one platform supply vessel with Troms Offshore Supply. Troms has agreed to enter into a charter for the operation of the vessel and is expected to sign the contract by the end of June 2012.
Significance: The capture of the single largest contract is testament of STX OSV’s growing clout in the marine and offshore market. Should the contract be successfully carried out, the company would be able to bolster its track record for future large contracts.
Chasen Clinches Contracts Worth $4.2 million
Catalist-listed Chasen Holdings reported that it has secured a series of contracts worth a total of approximately $4.2 million through various subsidiaries. Chasen’s locally based 51 percent owned subsidiary, Hup Lian Engineering was awarded four contracts amounting to an aggregate amount of about $1.8 million. The contracts were awarded by new customers and are expected to be completed by 2H12. Chasen‘s China-based subsidiary clinched a $2.4 million relocation contract from a major Chinese electronics manufacturer. The relocation contract is the fourth time Chasen’s subsidiary is working with this customer for its relocation needs. Low Weng Fatt, managing director of Chasen mentioned that the successful awards of these contracts were encouraging for the company. Low attributed the wins to Chasen’s proven track record with professionalism, smooth execution and timely delivery.
Significance: The contract wins will help to bolster Chasen’s financial performance moving into FY13 after it had recorded significant growth to its top line in FY12.
Kim Eng Likes SAT’s Cruise Venture; Maintains Buy
Integrated ground handling and in-flight catering services provider, SATS’ diversification into sea operations with a stake in the new Marina Bay Cruise Centre (MBCC) has left analysts at Maybank Kim Eng raving about the counter. Kim Eng feels that the tourism boom in Singapore would prove to be a particular boon to SATS as the encouraging tourist arrivals also signalled increased tourist receipts. While Kim Eng points to the increase in aviation passenger growth as a dominating pillar of growth for the company, it also notes that the cruise terminal will be a good complement to SATS performance. SATS, alongside its Spanish partner Creuers de Port de Barcelona, will run MBCC for an initial 10-year term under a 60:40 venture. The MBCC expects to receive 100,000 passengers in its first year. However, Kim Eng feels that SATS will only begin enjoying “significant earnings contribution” in the medium term from the venture, around MCC’s third year of operations.
Significance: While the cruise terminal venture does present some risk to SATS, investors should note that SATS boast resilient earnings, a healthy balance sheet as well as fairly attractive dividend yields. Notably, investors buying in now will stand to enjoy a bumper dividend of $0.21 per share (ex-date: 31 July 2012).