Tan Tin Yeow, chairman and managing director of XMH Holdings, has steadily been buying back shares after the company reported significantly better earnings, with shareholders poised to receive a final plus special dividend of 1.5 cents versus its current share price of 30 cents.
Tan’s most recent acquisition was on July 19, when he bought 51,100 shares on the open market for $16,096.50 or 31.5 cents each. This brings his total stake to nearly 48.5 million shares or 44.22%, up from 44.17% previously. Just a day earlier on July 18, Tan had acquired 69,900 shares for $21,669 or 31 cents each.
In the preceding fortnight, Tan had acquired more than 800,000 shares over seven different days, paying average prices ranging from 30 cents to 31 cents. Tan bought the most shares on June 30 when he acquired 520,000 shares for 30 cents each.
Like the entire marine, offshore and oil and gas industry, XMH suffered a steep downturn years ago. Back in December 2019, it was even put on the Singapore Exchange’s Watch-List. Companies in the list are usually given three years to improve their numbers, or at least, show improvement before an extension can be granted. On Dec 2, 2022, XMH was granted a 12-month extension by SGX to try and exit the watchlist by Dec 4.
As at April 30, XMH’s net asset value per share was 45.53 cents, up slightly from 43.35 cents as at April 30, 2022. However, as at July 26, XMH’s market cap was $32.9 million, well below the $40 million floor set by the exchange as one of the exit criteria.
Nonetheless, XMH has already turned profitable. In FY2023 ended April 30, it reported earnings of nearly $4 million, up 32.5% from FY2022’s $3 million. Revenue increased 79% to $128.7 million in FY2023, with growth from both its distribution and project segments.
XMH, whose business is to supply engines and other related parts for the marine industry, plans to pay a final dividend of 0.25 cents per share, plus a special dividend of 1.25 cents.
In its earnings commentary, XMH warns of geopolitical tensions causing inflationary pressures and thereby hurting economies. “Despite these difficulties, the group believes that it will be able to capitalise on the good performance achieved in FY2023. The group has already recorded a robust order book for the following reporting period,” says the company.
The company adds that its distribution segment continues to see strong demand for engines to be used in new replacement transportation tugboats and its project segment continues to record healthy orders mainly from data centres and infrastructure projects.
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Marine Darren Teo, a non-executive director of Marco Polo Marine, on July 21 acquired 1.5 million shares on the open market at 5.4 cents each. The transaction doubled his interest in the offshore services provider and yard operator to 3 million or 0.08%.
In addition, Teo is deemed interested in another 607.1 million shares via Apricot Capital, a fund managed by the Teos’ family office. This gives him a total interest of just over 610.1 million shares or 16.25%, up from 16.21%. The Teos are the second-largest shareholders behind the Lees, the founding family of Marco Polo Marine.
On May 11, Marco Polo Marine reported earnings of $5.8 million for 1HFY2023 ended March 31, down 46% y-o-y from $10.7 million.
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However, the company says that its adjusted earnings, which excludes forex losses, reversal of impairment loss on receivables and other non-operating, non-recurring items, would have been $8.5 million, up 372% y-o-y.