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Kim Heng chairman Tan raises stake; Kimly continues share buybacks

The Edge Singapore
The Edge Singapore • 3 min read
Kim Heng chairman Tan raises stake; Kimly continues share buybacks
Tan says the partnership with Dyna-Mac marks a significant step forward in its pursuit of sustainable long term revenue growth in the industry / Photo: Albert Chua
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Kim Heng’s chairman and CEO Thomas Tan increased his stake in the company. On Aug 21, Tan acquired 100,000 shares on the open market at 8.6 cents each. This brings his direct stake to 600,000 shares or 0.08%. In addition, Tan has a deemed interest in another 283.3 million, or 40.17%. This brings his total interest in the company to around 284 million or 40.25%.

Kim Heng is riding on a recovery in the offshore and marine sector, thanks to higher energy prices which has reignited dormant demand.

On Aug 8, the company reported revenue of $44.3 million for its 1HFY2023 ended June, up 26% y-o-y. While the company’s overall revenue was higher, the various segments turned in a mixed bag. Revenue increased for its marine support services segment. Kim Heng booked higher revenue from trading of vessels and material sales. However, it suffered lower turnover in its equipment rental and vessel chartering segments.

However, Kim Heng, for 1HFY2023, enjoyed lower gain on disposal of fixed assets recognised as it did not enjoy reversal of inventories obsolescence recognised in the year earlier 1HFY2022. It had to bear higher finance costs as well. As such, it reported earnings of $1.74 million for 1HFY2023, down 66% versus around $5.1 million recorded for 1HFY2022.

In its earnings commentary, Kim Heng says it is “well positioned” to extend its strategic footprint into the renewables offshore market as it continues to explore new markets in Asia in addition to Taiwan. The company says that demand for vessels chartering will remain strong and with its recent acquisition of vessels as announced on Feb 24, will enable the company to capitalise revenue growth in chartering segment as well as revenue derived from modification of reactivated vessels for on-selling.

In a separate announcement on Aug 15, Kim Heng announced a two-year MOU with Dyna-Mac Holdings to give the latter use of Kim Heng’s yard facilities in exchange for a fee. The MOU, which will be renewed automatically, gives Dyna-Mac, which specialises in building topside modules for rigs, the flexibility to address spikes in demand. “This partnership empowers us to engage in more substantial, intricate, and high-value projects, marking a significant step forward in Kim Heng’s pursuit of sustainable long-term revenue growth in the industry,” says Tan.

See also: OUE resumes share buybacks; Wing Tai chairman's wife actively buying

“This mutually advantageous partnership between Dyna-Mac and Kim Heng aligns with the strategic vision of both companies, reflecting our shared commitment to providing enduring value for our respective shareholders,” says Dyna-Mac’s executive chairman and CEO Lim Ah Cheng.

To trade these shares with Tiger Brokers:

See also: Sarine Technologies starts buybacks; Fund raises stake in UOL Group

Kim Heng and Kimly

Income from new outlets

Coffeeshop chain operator Kimly has been buying back shares occasionally. The most recent was on Aug 21 when it acquired 100,000 shares on the open market at 32 cents each. This brings the total number of shares bought back under the current mandate to around 2.83 million shares, equivalent to 0.2277% of the total share base. Before this, on Aug 17 and 18, Kimly bought 45,000 shares and 5,000 shares respectively at 32 cents each.

On May 11, Kimly reported earnings of $18.7 million for its 1HFY2023 ended March, up 0.7% y-o-y from $18.5 million recorded for 1HFY2022. Revenue in the same period dipped slightly by 0.9% y-o-y to $155.5 million, no thanks to lower contribution from its food retail business, which was down $5.5 million to $91.2 million. Kimly attributes the drop to lower delivery sales following the lifting of pandemic restrictions.

In addition, it closed several outlets which contributed to lower food sales. On the other hand, its outlet management segment enjoyed higher revenue thanks to new coffeeshops under its charge as well as lower rental rebates Kimly gave.

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