(EnergyAsia, July 25 2011, Monday) — Dyna-Mac Holdings Ltd, a Singapore-based provider of engineering, procurement and construction (EPC) services to the offshore oil and gas industries, has reported a 29% increase in net profit to S$7.6 million on revenue of S$44.8 million for its fourth quarter ended May 31 2011. (US$1=S$1.22).

The company has proposed to pay a final cash dividend of S$0.02 for FY2011.
Dyna-Mac said its revenue for the fourth quarter dipped 3% to S$44.8 million a year ago, reducing its gross profit by 6% to S$13.9 million.

On a 12-month basis, the group reported revenue and net profit of S$167.9 million and S$24.8 million for FY2011, compared to S$218.5 million and S$25.5 million in the previous year, respectively.

The revenue decline was largely due to the slowdown in activities in the oil and gas industry following the oil spill disaster in the Gulf of Mexico in April 2010. As an immediate response, the US federal government ordered a moratorium which was lifted in the fourth quarter of 2010.

In spite of this, Dyna-Mac said it achieved a much improved gross profit margin of 30% for FY2011, up from 23% a year ago. This was due to a reversal of contingent costs related to projects completed in previous years and the completion of high-margin projects.

The company’s order book stands at about S$117 million including two projects worth S$18 million from the Keppel Group.
“Barring any unforeseen circumstances, the group believes that the outlook for the coming financial year will remain cautiously optimistic,” it said.

The company believes oil prices will remain supported as well as volatile. 

Executive chairman and CEO Desmond Lim Tze Jong said: “High oil prices and the resumption of deepwater drilling activities in the Gulf of Mexico will continue to encourage demand for our services. While two of our projects have been rescheduled to commence in the last quarter of 2011, we are pleased to have secured two recent projects from the Keppel Group that will also contribute to our performance in FY2012.

“At the same time, we continue to enjoy strong support from our long-standing customers such as SBM Offshore, Modec and Bumi Armada. We are also optimistic of securing more projects in the near future.”