Boustead

[millionairemind]

0854 GMT [Dow Jones] DBS Vickers cuts Boustead Singapore (B04.SG) target price to S$2.73 from S$2.85, maintains Buy rating after 1Q09 results. Says 1Q09 results not representative of group's overall performance in FY09, expects higher engineering, procurement and construction (EPC) revenue recognition over forthcoming quarters; company has already demonstrated strong order win momentum YTD in FY09, outstanding order book at S$800 million.

"Our FY09 EPC revenue assumption is already more than 85% backed by secured orders," broker says. Notes company's reported 1Q09 results not overly impressive with net earnings down 39% to S$5.6 million, but underlying net profit was up almost 100% after stripping out gains from one-off sale of UK property in prior period. Shares untraded so far today, stock closed down 0.4% at S$2.28 Tuesday. (KMH)

[Musicwhiz]

For info - FF Wong has been buying shares in Boustead. Thus far, he has bought 542,000 shares (all at $1.00 apiece) within the last 5 trading days, increasing his stake to 31.81% in the company.

[millionairemind]

Published November 15, 2008

Boustead's Q2 profit drops 43.2% to $9.5m
By VEN SREENIVASAN

BOUSTEAD Singapore's second-quarter profit dropped sharply as 'lumpy' earnings from the corresponding period last year were not repeated during the July-September 2008 quarter.

Profit for the three months ended September 2008 was $9.5 million, a 43.2 per cent drop from the $16.8 million chalked up a year ago.

However, topline revenue for the three months rose 12.5 per cent to $131 million, from $116.4 million last year. For the first half ended September, Boustead's net profit fell 41.6 per cent to $15.2 million, from $26 million for the year-ago period.

Speaking to BT, the company's chairman and chief executive officer, Wong Fong Fui, said that despite the sharp fall in earnings, the company was on track to do better this year than in FY2007/08, when it posted a record $51.5 million in full-year profit. 'This is a timing issue,' he said. 'In our business, project flows and completions can be lumpy. Sometimes we realise the gains during a particular quarter of one year, but moves to another quarter the following year. Anyway, our second half will be good as we will realise gains from project completions.'

He explained that his company chalked up gains of $14 million from design-and-build project sales during the first half of last year. If these were taken out, the current first-half net profit would have been 30 per cent higher, he noted.

Boustead could chalk up some $20 million from similar sales during the October-March 2009 period. These deals were inked during the first half.

Meanwhile, the company sits on some $117 million in net cash and has $700 million worth of projects in hand, including more than $300 million worth of projects in Libya.

Boustead - which turned 180 years this year - declared an interim dividend of 1.5 cents per share, which works out to the same as its pre-share split payout of three cents per share in FY07/08.

All its business units did well during the quarter.

Its energy-related engineering division's revenue grew 16.5 per cent to $42.4 million, while the water and wastewater division's revenue grew 25 per cent to $11.6 million. The latter has recently clinched a $175-million water infrastructure upgrading project in Libya. The real estate solutions division's revenue was up 6.3 per cent at $57.4 million. Since the start of FY2009, this division has secured more than $200 million in contracts. Boustead's geo-spatial technology division's revenue grew by over 18 per cent to almost $18.7 million, thanks to strong demand for intelligence solutions in Australia.

[Musicwhiz]

Boustead has announced 1H FY 2009 results. It turns out that the sale of property will be recognized in 2H FY 2009 instead, so I am still expecting a good dividend for FY 2009 as a result of this upcoming transaction. Stripping out one-off gains, core net profit would have increased 30% from 1H 2008 to 1H 2009.

The Al Marj township project is proceeding slowly (according to Management) but progressively more revenue should be recognized in 2H 2009 as compared to 1H 2009. Management also confirmed that the S$175M Salcon water project in Libya will commence in 2H 2009, thus deferring earnings for that division.

Surprisingly, ESRI showed good growth of 18% in terms of revenues from 1H 2009 compared to 1H 2008; but moving forward this will be partially tempered by the exchange losses expected to be incurred from the depreciation in the AUD against the SGD. Overall, a conservative estimate of 5-10% growth for FY 2009 compared to FY 2008 is still expected (by me).

Management will be looking out for more targets for acquisition should they come around, and being in a net cash position definitely helps ! One negative point is that oil and gas contracts are taking longer to negotiate due to the credit crisis, but none are cancelled just yet. Boustead Maxitherm is still in the process of sorting itself out and should not contribute too much for FY 2009. However, in the medium term things should pan out nicely.

The Company has declared an interim dividend of 1.5 cents per share, ex-date is December 1, 2008 and payable on December 18, 2008. Based on today's closing price of S$0.68, this represents a yield of 2.2%. The surprising thing was that the Company managed to maintain their dividend for 1H 2009 even though project cash inflows were weaker compared to 1H 2008.

Boustead traditionally has a stronger 2H compared to 1H, so one should NOT annualize the numbers in the P&L as they would not be very meaningful. Will look forward to (hopefully) mroe contracts from the Company.

P.S. - The fact that NO brokerage wants to cover this company means that it will remain "under the radar". Kindly do your own independent reading and research on the company to find out their merits. A lot of info can be found on their corporate website at http://www.boustead.sg.

I have done a small update on my blog but will proceed to do a more detailed discussion in a future post, so check back now and then (it will take time as I need to compile the info).

Cheers !

[blid2def]

MW - thanks for your post again. If there's something I hope we could improve on Huatopedia, it's the commentary/analysis to news/articles ratio. We definitely could do a lot better with more commentaries and analysis work. Thanks again for your contributions.

[Musicwhiz]

MW - thanks for your post again. If there's something I hope we could improve on Huatopedia, it's the commentary/analysis to news/articles ratio. We definitely could do a lot better with more commentaries and analysis work. Thanks again for your contributions.

Dear Grandrake, you are most welcome !

Will be doing one for Tat Hong as well, so will update Huatopedia when it's ready (I will post a small snippet and link the rest to my blog, if you are OK with it). Thanks !

[blid2def]

No problem, that's fair enough for me. As I've mentioned before (maybe? haha), I've never had a problem with folks providing links to their works in their own blogs, sites, even other forums - as long as it isn't blatant advertising intended to pull hits or generate business leads (we have eagles' eyes and dogs' noses to spot and sniff out those cases).

I can understand that it's double effort to copy and paste information all over again, so I agree with your approach - just a short summary with a link to the juices will do. I do that myself for articles that I come across elsewhere that I want to share with folks here.

I believe that the originating sites for the articles we share here should not be deprived of the web traffic they should be getting. It's also a means to acknowledge and credit them for their work.

Cheers!

[kennynah]

a very fair person you r GR.....

now...do u allow me to direct traffic to my Jap AV blog? i promise to post some sniplets to juice up the interests

http://www.kennynahjapav.blogspot.com


((edited on 26Nov08 : i am lost for words for those who previously clicked on the link above .... hahahaha...it was a joke lah))

[Musicwhiz]

Dear all, I've done an analysis and review of Boustead's 1H FY 2009 financials and prospects on my blog. Please feel free to visit and leave comments, thanks !

Below is a snippet:-

"Boustead had released their 1H FY 2009 results on November 14, 2008. At first glance, it looked as if the Group had done quite terribly, as net profit due to shareholders was down 41.6% for 1H 2009 compared with 1H 2008. On closer inspection however, it seems that the reason for the apparent decline was because of exceptionals which had been recognized in 1H 2008. Stripping this out, net profit attributable to shareholders would have increased by 30.2% for 1H 2009 to S$15.2 million, implying that core net profit for 1H 2008 stood at S$11.7 million. More will be elaborated on in the following sections."

[millionairemind]

January 12, 2009, 5.39 pm (Singapore time)

Boustead secures 5 contracts worth S$64 mln
By UMA SHANKARI

Boustead Singapore Limited on Monday said that its energy-related engineering division has secured five contracts totalling S$64 million from the global oil & gas and power industries.

The latest contracts involve the design, process engineering and construction of key process equipment for large refineries, gas processing plants, petrochemical plants and power plants located in Brazil, Indonesia, Saudi Arabia, the United Kingdom and the United States.

'We are delighted to have been awarded these contracts from repeat clients, especially in light of the challenging times ahead. These contracts represent a good start to 2009 and will replenish our order book,' said Wong Fong Fui, Boustead chairman and group chief executive.

The energy-related engineering division has also reached a milestone by securing its first downstream oil & gas contract in the United States, the world's largest energy market, said Mr Wong: 'We hope to build on this foundation to develop this market further.'

The contracts are not expected to have a material impact on the profitability, earnings per share and net asset value per share of the company in the current financial year ending March 31, 2009. However, the contracts are expected to have a positive material impact on the profitability and earnings per share in the next financial year, the company said.

Boustead shares closed 1.5 cents down at 68 cents on Monday.