(EnergyAsia, March 3, Monday) — Singapore-listed Rotary Engineering Limited has announced a record after-tax net profit of S$52.8 million for the full year ended December 31 2007, up 50% from FY2006. (US$1=S$1.4).
The group’s turnover hit a new high of S$510.2 million, an increase of 17% over S$437.4 million from the previous year. The increase in turnover is largely accounted by contributions from several on-going projects on Jurong Island.
The company is proposing a final dividend of 2.3 cents per share, which together with the interim dividend of 2.3 cents per share that it paid out last September, works out to a total yield of 4.6% to 4.8% based on last week’s share prices of 0.96 cents to S$1.
Rotary, a leading provider of engineering, procurement, construction and maintenance services for the oil, gas and petrochemical industries, has been developing a niche as a builder of oil storage terminals and depots.
Chia Kim Piow, Rotary’s chairman and managing director, said: “We are happy to have completed our mega-project, Universal Terminal, ahead of schedule. We also managed to secure a number of new projects in the year and this has enabled us to enjoy some economies of scale.
“Overall, it has been a good year although there have been ups and downs. The results show that we have the capabilities to deliver services to our clients’ satisfaction, the necessary foresight to make the right strategic moves in a competitive market, and a strong management team that is able to lead our people in the right direction.”
The group also registered a stronger gross profit margin of 24.4% and PATMI (profit after tax and minority interest) margin of 10.4% compared to 18.4% and 8.0% respectively the previous year.
Earnings per share for the year under review rose to 9.3 cents against 8.7 cents in the preceding year.
Quarter-on-quarter, the group’s net profit after tax and minority interest stood at S$12.4 million, 54% up from S$8 million it recorded in the previous corresponding quarter. Its turnover performance this quarter dipped 16% to S$98.9 million from S$117.3 million previously due to recognition of revenue as a result of completion of several major projects in the last quarter of 2006.
Rotary said its overseas activities contribute about 18%, or S$93.9 million, to its revenue, up from 14% previously.
Thailand was the biggest contributor with S$73.2 million, due to the execution of projects secured over the past two years.
The group’s persistence in forging a presence in oil-rich Middle East paid off with a modest contribution to revenue of S$4.5 million in FY2007.
Rotary said its financial standing remains robust with net tangible assets of S$175.2 million and a strong net cash position of S$123.8 million. Its market capitalisation exceeded S$550 million at end of February, while its total order book to date stands at a record S$640 million.
Mr Chia remains upbeat on the outlook for the oil-and-gas industry.
“There are projects coming up on Jurong Island such as ExxonMobil’s second world-scale petrochemical project and Neste Oil’s largest next-generation biodiesel manufacturing plant. The oil industry continues to be important to the Singapore economy. These are factors that are favourable for our business,” he said, adding that Rotary would also be actively looking to tap overseas markets, such as the Middle East and China for further growth.