Thursday 15 November 2012

ASL Marine

OCBC on 14 Nov 2012

ASL Marine (ASL) reported a 7.1% YoY rise in revenue to S$89.0m and a 15.7% increase in net profit to S$9.8m in 1QFY13, such that net profit accounted for 23.2% of our full year estimates, in line with our expectations. The group saw a significant increase in gross profit margin in 1QFY13 (24.8%) compared to1QFY12 (11.5%) and 4QFY12 (15.3%), driven by better performance across all three business segments. Meanwhile, ASL also announced that its subsidiary will acquire all the shares of Vosta LMG International B.V. for 5.1m euros (S$8.0m). Vosta is well-known in the dredging industry, being an established company with more than 140 years of history. ASL’s shipbuilding order book from external customers stood at S$573m as at 30 Sep 2012 with deliveries up to 2Q14. Business operations remain healthy, and the group is well positioned to secure orders in a recovering offshore support vessel market. Maintain BUY with S$0.82 fair value estimate.

Steady 1QFY13 results
ASL Marine (ASL) reported a 7.1% YoY rise in revenue to S$89.0m and a 15.7% increase in net profit to S$9.8m in 1QFY13, such that net profit accounted for 23.2% of our full year estimates, in line with our expectations. Shipbuilding revenue declined by 7.5% to S$43.4m in the quarter, mainly because most of the higher value projects have yet to reach the 10% recognition mark. Shiprepair and conversion, as well as shipchartering, however, saw a 23.5% and 28.6% rise in revenue, respectively. 

Improvement in margins across the board
The group saw a significant increase in gross profit margin in 1QFY13 (24.8%) compared to1QFY12 (11.5%) and 4QFY12 (15.3%), driven by better performance across all three business segments. Recall that shipbuilding was earlier affected by cost overruns in 1QFY12, but continuous efforts in cost monitoring and better project management have delivered results. Shiprepair also recorded higher gross profit margin of 23.3% with a greater number of higher margin jobs undertaken during the period. Finally, ship chartering’s gross profit margin increased from 14.5% in 1QFY12 to 33.3% in 1QFY13.

Staying ahead of the curve
Meanwhile, ASL announced that its subsidiary has entered into a conditional sale of and purchase agreement to acquire all the shares of Vosta LMG for 5.1m euros (S$8.0m). Vosta is well-known in the dredging industry, being an established company with more than 140 years of history. This move allows ASL to acquire cutting edge dredging technology as it moves up the value chain.

Maintain BUY
ASL’s shipbuilding order book from external customers stood at S$573m as at 30 Sep 2012 with deliveries up to 2Q14. It also has a shipchartering order book of about S$54m with respect to long-term contracts. Business operations remain healthy, and the group is well positioned to secure orders in a recovering offshore support vessel market. Maintain BUY with S$0.82 fair value estimate.

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