SembMarine Secures US$434m Rig Orders
Sembcorp Marine’s subsidiary, PPL Shipyard, has secured two turnkey contracts worth a combined US$434 million for the construction of two units of jack-up rigs from Mexican oilfield services company, Integradora de Servicios Petroleros Oro Negro. Based on PPL Shipyard’s proprietary design, the PPL Pacific Class 400, these new rigs will be capable of operating in deeper waters of 400 feet and equipped with the latest drilling equipment for improved drilling efficiencies with offline handling features and simultaneous operations support. “The jack-up rig order is a reflection of the optimism that the owner has in the jack-up rig market and in particular our design and our ability to deliver on schedule and within budget,” said Douglas Tan, managing director in PPL Shipyard.
Significance: The contract is expected to be earnings accretive. Meanwhile, the jack-up rigs are scheduled for delivery at the end of the fourth quarter next year and the end of the first quarter in 2014.
Stamford Tyres’ 1H13 Profits Hold Steady Despite Margin Squeeze
One of South East Asia’s largest independent tyre and wheel distributors, Stamford Tyres Corporation announced a 7.2 percent rise in revenue to $181.7 million while profits rose marginally by 1.3 percent to $3.8 million for the half year ended 31 October. The company attributed the revenue increment to the steady growth across various geographical markets. Profits, however, did not increase as much, as gross profit margin declined to 19.1 percent from 24.1 percent previously due to higher historical cost of goods sold during this period. On a quarterly basis, revenue was up 7.8 percent year-on-year to $90.4 million while earnings fell into the red dragged by $1 million in allowance for doubtful receivables due to collection issues in Europe and China, although it was partially offset by stocks provision write-back arising from its inventory rationalisation efforts.
Significance: Although Stamford Tyres has been rationalising its inventory levels and optimising its inventory holding as it heads into the seasonally busier second half of its financial year, it notes that 2H13 will remain challenging due to the lacklustre economic sentiments and business conditions.
Etika Rises On Share Placement
Shares of Etika International opened 17.6 percent higher this morning as the market welcomes news that a subscription agreement with Tee Yih Jia Food Manufacturing was inked. The deal will see the manufacturer and distributor of sweetened condensed milk and evaporated milk issue 75 million new shares at $0.1998 apiece to Tee Yih Jia Food Manufacturing. The issue price is about a 10 percent discount to Etika’s weighted average price of $0.222 on 5 December. The new shares represent about 14 percent of the existing share capital of Etika. Upon completion of the subscription, Tee Yih Jia Food Manufacturing will hold about 12.3 percent of the enlarged issued share capital of Etika and the former will be entitled to nominate a person to be appointed on the board of directors of Etika. Established in 1969, Tee Yih Jia Food Manufacturing is the world’s leading manufacturer of spring roll pastry and a wide range of Asian frozen convenience foods. Of the $14.96 million in net proceeds raised, Etika intends to use 50 percent for capital expenditure and the balance 50 percent for working capital.
Significance: The news was a major booster for Etika’s stock price which has been badly hit this year as it hit a low of $0.175 in October. Evidently, investors’ confidence were raised with the inclusion of a world leader in the manufacturing of spring roll pastry and a wide range of Asian frozen convenience foods as a stakeholder.