See Hup Seng, the provider of corrosion prevention services in Singapore and strategic value-added distributor of refined petroleum products in Asia Pacific, today reported net profit of $2.3 million for the financial year ended 31 December 2009 (FY2009) on full-year revenue of $157.2 million.

The Group ended FY2009 on a relatively firm note with revenue in the last quarter of the year (4Q09) growing 13% year-on-year to $44.7 million. This was the best quarterly revenue the group witnessed throughout FY2009. On a full-year basis however, group revenue in FY2009 was down by 22% compared to FY2008 due to the fallout of the global financial crisis. Sales of the group’s two business segments – corrosion prevention (CP) and refined petroleum distribution (TAT Petroleum) in FY2009 were affected by a significant slowdown in customers’ orders and increased competition.

Revenue of CP segment in FY2009 decreased 42% year-on-year to $32.9 million as demand for corrosion prevention services diminished with the significant slowdown in the marine industry and steel distribution sector. On a quarterly basis however, revenue edged up from $7.3 million in 1Q09 to $8.9 million in 4Q09, lifted mainly by the group’s tank coating services for FPSO conversions.

TAT Petroleum registered a 14% decline in revenue to $124.3 million in FY2009 due to a contraction in demand for refined petroleum products and reduction in average selling prices. In tandem with the improvement in industrial activities in the region, TAT Petroleum saw better momentum for customer orders in the second half of FY2009 and achieved revenue of $35.8 million in 4Q09. This translated into an increase of 33% from 1Q09 and 19% from the same period a year ago.

Group gross profit margin narrowed slightly to 18% in FY2009 as CP segment’s gross profit margin was reduced to 23% (FY2008: 30%) due to the combined effects of price pressure, change in sales mix, and under-absorption of fixed overhead costs. TAT Petroleum on the other hand improved its gross profit margin to 17% in FY2009 (FY2008: 15%) despite selling price adjustments in the second half of FY2009 caused by the fall in the price of crude oil.

The group’s initiatives to streamline its cost structure during the first half of FY2009 have in part mitigated the impact of weaker sales and gross profits on its profitability. Consequently, the group posted a net profit of $2.3 million in FY2009, a decline of 82% from FY2008.

Notwithstanding the difficult business backdrop, the group continued to strengthen its balance sheet. As at 31 December 2009, it had higher cash and cash equivalents of $40.5 million, and lower net gearing of 0.03 times.

Given its healthy balance sheet, See Hup Seng is proposing to pay a final dividend of 0.3 cents per share (one-tier tax-exempt) in respect of FY2009 to reward shareholders.