FPSO pipeline for Dyna-Mac looks encouraging but competition is heating up

FPSO pipeline for Dyna-Mac looks encouraging but competition is heating up

By: 
Samantha Chiew
31/08/18, 03:37 pm

SINGAPORE (Aug 31): Dyna-Mac Holdings, the engineering, procurement, and construction services provider to the marine construction and offshore oil & gas industries, reversed out of the red in 1H18 with earnings of $1.21 million, compared to a loss of $22.2 million in 1H17.

2Q18 saw earnings of $1.04 million, compared to a loss of $12.5 million in 2Q17.

Revenue for 1H18 more than quadrupled to $59.8 million from $13.5 million last year, which made up 60% of CGS-CIMB’s full-year forecast.

The research house also has maintained its “buy” call on Dyna-Mac with a lowered target price of 13 cents.

The group’s gross profit margin (GPM) of 18% was below CGS-CIMB’s 19% estimate but higher revenue mitigated the bottomline impact.

As at end-June, the group was still in a net cash position of 2.6 cents per share. The management guided that the assets earmarked for sale ($32 million), are still pending approval.

In a Thursday report, analyst Cezzane See says, “This asset sale could lift DMHL’s net cash position further and provide it the stability to ride out delays in order wins, in our view.”

In addition, ExxonMobil announced that the Liza Phase 2 FID earlier in July. There was also news from Upstream Online that the group was bidding for the topside fabrication work of Petrobras’s Buzios-5 FPSO.

Compared to the Liza 1, both projects have larger production capabilities.

Meanwhile, Clarksons said that 33 floating production, storage and offloading vessel (FPSO) and floating liquefied natural gas unit (FLNG) projects worth US$25 billion in total could be awarded in CY18-20F (excluding redeployment awards).

Although the group’s FPSO pipeline looks encouraging, competition remains keen with more Chinese names emerging in FY18.

“We believe this keen competition is one of the reasons why GPM is still under pressure,” says See, who has turned conservative and reduced GPM estimates.

“Our thesis for DMHL is that its cleaner balance sheet improves its operating leverage when contract wins emerge but, given the stiff competition, this could take longer than expected,” adds See.

As at 3.35pm, shares in Dyna-Mac are trading at 11 cents or 1.11 times FY18 book.

Lendlease a step closer to listing of mall REIT on SGX: reports

SINGAPORE (May 23): Australia’s Lendlease could potentially be the next REIT to list in Singapore, following the footsteps of two recent US REITs. According to The Australian, Lendlease has appointed investment banks Citigroup and DBS to handle the listing. The Singapore trust, to be named Lendlease Global Commercial REIT, could be seeded with shopping centre assets worth A$1 billion ($948 million). Listed on the Australia stock exchange (ASX), Lendlease is a integrated construction, engineering and property company. Singaporeans may also be familiar with Lendlease given the comp....
Read More >>

China defence minister to attend summit amid rising US tension

(May 22): Chinese Defence Minister Wei Fenghe will address top diplomats at an upcoming summit in Singapore in a speech that could be pivotal amid rising tensions between the US and China. The International Institute for Strategic Studies (IISS) announced the late addition Monday to a roster of ranking officials that includes US Acting Secretary of Defence Patrick Shanahan attending the three-day IISS Shangri-La Dialogue from May 31. Wei is scheduled to deliver a speech on China’s place in the Indo-Pacific region on the final day of the conference and will take questions afterwards, wh....
Read More >>

SingHaiyi reports 48% rise in 4Q earnings to $9.7 mil on higher margins from US development

SINGAPORE (May 22): Property developer SingHaiyi Group reported a 47.6% rise in 4Q19 earnings to $9.7 million from a year ago, bringing FY19 earnings to $22.6 million, 20.3% lower than a year ago. Revenue declined 67.6% to $9.8 million from a year ago mainly due to the decrease in revenue recognised for the group’s completed Executive Condominium project, The Vales, and the group’s completed private condominium, City Suites. The lower topline was partially offset by the sales of the group’s completed commercial condominium project in the United States – Vietnam Town Phase II, whi....
Read More >>