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Stocks In Focus SG (Ezion Holdings, Oxley Holdings, Sin Heng) – 29/08/13
Ezion Bags US$49.1m Contract
Ezion Holdings announced that it has secured a charter contract with a value of approximately US$49.1 million over a four-year period to provide a service rig to be used by an oil major to support its oil and gas activities in the Middle East. The service rig is expected to be deployed and working in the offshore oil and gas fields in the Middle East around mid-2014 after its refurbishment and upgrading. Notably, the company will also form a joint venture with Kim Seng Holdings through its subsidiary, Scott & English, to acquire and own the service rig. Earlier, Ezion had issued $60 million 4.6 percent notes due 2018 under its $500 million multicurrency debt issuance programme, where the proceeds will be used for general corporate purposes, including the financing of investments in offshore and marine assets and general working capital.
Significance: The strong demand from its customers in the oil and gas industry is expected to continue to benefit its service rigs chartering segment. The healthy contract momentum also provides Ezion strong earnings visibility in the coming financial years.
Oxley’s FY13 Earnings Leaps 309% to $69.1m
Oxley Holdings announced its FY13 results with its net profit rocketing 309 percent to $69.1 million from $16.9 million in the previous financial year. The increase in net profit is mainly attributed to a 187.2 percent surge in revenue to $457.7 million from $159.4 million in FY12 due to the recognition of revenue from its property development projects and an improvement in the gross profit margin to 30.2 percent from 24.6 percent a year ago. The earnings per share in FY13 grew 288.9 percent to $0.0245 from $0.0063 in FY12. Notably, the company holds a strong cash position of $436.5 million. The company proposed dividend of $0.006 per share. Separately, Oxley has awarded a $98.9 million contract for the construction and maintenance of NEWest, with duration from September 2013 to March 2016 with completion expected within 30 months, to Kim Seng Heng Engineering Construction, a subsidiary of KSH Holdings.
Significance: Oxley remains cautious about the upcoming year in view of various cooling measures introduced by the Singapore government, which has resulted in softer demand in the residential and industrial property segments, and will adopt a more prudent approach towards land acquisition strategy.
Sin Heng Records 47.4% Jump In FY13 Net Profit To $13.8m
Sin Heng Heavy Machinery announced a 47.4 percent surge in its FY13 net profit to $13.8 million from FY12’s $9.3 million. The increase in net profit is attributed to an improvement in the gross profit margin to 16.2 percent and also a revenue growth of 44.3 percent to $186.5 million from $129.2 million in FY12. The breakdown of the revenue growth consists of its trading segment which increased 49.3 percent to $133 million mainly due to the higher volume of cranes traded, followed by the equipment rental segment improved 33.3 percent to $53.5 million mainly due to the increase in revenue from expanded fleet size. The group holds a healthy balance sheet with a strong cash position of $26.7 million and is proposing a final dividend of $0.0045 cent per share. Sin Heng is expanding its business activities in Malaysia and Vietnam and, albeit small, in Myanmar which offers huge potential for the group’s business to grow.
Significance: Sin Heng is confident of reaching a greater height with its vast experience and knowledge. Its recent rights issue helps to increase capital base, strengthen balance sheet and enhance financial flexibility to capitalise on potential opportunities as well as its expansion plan.
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