CSC Holdings

[iam802]

From SIASResearch:

CSC

* Leading foundation and geotechnical engineering specialist CSC Holdings Limited (“CSC” or “the Group”), today announced a 400% surge in net profit to S$43.2 million for the full year ended 31 March 2008 (“FY08”), representing a return on equity of 40.3%. This compares to a net profit of S$8.6 million registered in the previous financial year (“FY07”). Earnings per share was 3.85 cents, a growth of 343%, compared with 0.87 cents in FY07.

* Riding the construction upswing in Singapore, Group revenue soared 282% to S$483.7 million from S$126.7 million in FY07 as compared to Building and Construction Authority’s (“BCA”) report of a 46% growth in the value of construction contracts awarded in 2007 from S$16.8 billion in 2006 to S$24.5 billion in 2007.

* The Group’s gross profit margin registered an improvement from 15.4% in FY07 to 20.2% in FY08. This was attributable to the strong demand for specialist foundation work and the Group’s improved operational efficiency.

* The BCA has projected the value of construction activity to reach between S$23 billion and S$27 billion this year, and the Group is well-positioned to benefit from this. Having made inroads into Malaysia with its joint venture with IJM Construction Sdn Bhd, CSC is also looking to boost its revenue stream by diversifying into the Middle East and other Asian markets.

* As at 23 May 2008, the Group’s outstanding order book was approximately S$400 million and the Group is poised for more business, given the sanguine industry o

[winston]

Not vested. From CIMB:-

• Within expectations. FY08 net profit of S$43.2m (+400% yoy) was in line with our forecast of S$42.8m. Gross margins improved to 20.2% from 15.5% a year ago, attributable to improved operational efficiencies and better-margin contracts. 2HFY08 net profit rose 533% yoy to $24.1m from S$3.8m in 2HFY07. A final dividend of S$0.005 and special dividend of S$0.004 were declared.

• Operational review. FY08 revenue rose 282% yoy to S$484m on strong demand for specialist foundation engineering (+287% yoy to S$449m) and equipment trading and leasing (+444% yoy to S$33.9m). Depreciation expenses rose sharply due to a reduction in the useful life of equipment from 15 years to 10 years.

• Improved financial position. CSC now has net cash of S$20.3m. It had managed its cash cycle well, with receivables at 38 days vs. payables at 100 days. Operating cash flow was S$50.7m vs. just S$2.2m in FY07.

• Positive outlook. Management remains optimistic of business prospects in the next few years. Current order book of S$400m is expected to expand further as it has been bidding for contracts. Management, however, acknowledged the potential adverse impact from inflationary pressures but given the nature of foundation engineering work, materials can be procured at fixed prices upon securing contracts. Also, CSC’s average contracts have short tenures of 3-6 months, which limits CSC’s exposure to fluctuating prices. A JV with Malaysia’s IJM Corporation is expected to develop new business revenues from the Middle East and India in the medium term.

• Maintain Outperform; lower target of S$0.49 (from S$0.57). With the Kok Tong acquisition aborted, we have cut our growth assumptions and reduced our net profit forecasts by 0.3-16.4% for FY09-10. We also introduce FY11 forecasts. We continue to value CSC at 10x CY09 P/E, in line with P/E targets for industry peers. Our new target is S$0.49 (previously S$0.57) after our earnings reductions. Maintain Outperform on the back of a still-strong order book and mitigated cost pressures.

[winston]

From Phillips:-

Results in line with expectation. CSC Holdings announced net income of S$43.2 (+400.3% yoy) mil on revenue of S$483.7 mil (+281.8% yoy) for FY08. Gross profit margin improved from 15.4% in FY07 to 20.2% in FY08, while net profit margin increased from 6.8% in FY07 to 8.9% in FY08. The Company proposed a final dividend of 0.5¢/sh, along with a special dividend of o.4¢/share (tax exempt).

FY08 powered by doubling of capacity. FY08 saw the first full year contribution of L&M Foundation Specialists, a subsidiary that was acquired towards the end of FY07. The acquisition of L&M doubled CSC’s equipment fleet and capacity, which facilitated growth in both top and bottom lines. According to the management, margins were also stronger due to better economies of scale achieved. Management also attributed growth in FY08 to better pricing power amidst the current capacity crunch.

FY09 likely to be marked by geographical expansion. While growth in FY08 was largely fueled by fleet expansion, we expect CSC’s plans to expand geographically to become more apparent in FY09. While we expect results and profitability to continue strengthen into FY09, growth is more likely to be muted.

Maintain BUY, FVE S$0.45. We believe CSC is still an attractive buy at the current price, given the Company’s growth prospects, strategic positioning in the region, and the management’s prudent financial management. We maintain our BUY call on CSC, keeping to our DCF-derived FVE of S$0.45.

[winston]

Not vested. From CIMB:-

CSC (Outperform, S$0.29, target S$0.49).

Management remains optimistic of business prospects in the next few years. Current order book of S$400m is expected to expand as the company has been bidding for contracts. While management acknowledges inflationary pressures, its materials can be generally procured at fixed prices upon securing contracts.

Also, CSC’s average contracts are short at 3-6 months, which limits its exposure to fluctuating prices.

We continue to value CSC at 10x CY09 P/E, in line with targets for industry peers, translating into an unchanged target price of S$0.49.

[millionairemind]

November 6, 2008, 7.02 pm (Singapore time)

CSC's Q2 net profit up 11.7% on robust construction
By ANGELA TAN

Foundation and geotechnical engineering specialist CSC Holdings Limited on Thursday reported its fiscal second quarter ended September 30, 2008 rose 11.7 per cent from a ayear ago to S$12.40 million.

Revenue grew 59 per cent to S$177.28 million, thanks to a robust construction sector in Singapore.

Group borrowings as of 30 September 2008 amounted to $97.2 million. Despite the increase which was largely attributed to financing obtained to acquire productive assets, the group's debt equity ratio improved to 62.4 per cent from 63.7 per cent as of 31 March 2008.

Its board of directors remains optimistic about the group's performance for financial year 2009.

They declared an interim dividend of 0.23 cents a share.

[millionairemind]

February 5, 2010, 6.23 pm (Singapore time)

CSC's Q3 net profit tumbles 40.7%, optimistic about Q4 profits

By ANGELA TAN

Foundation and geotechnical engineering specialist, CSC Holdings Limited reported on Friday net profit for the third quarter to end December 2009 fell 40.7 per cent to S$4.46 million.

Revenue fell 41.3 per cent to S$72.26 million.

CSC said many construction projects were delayed due to uncertain market conditions and availability of funding in 2009.

The group is optimistic that it will be profitable in the remaining quarter of the financial year. It believes that iIn 2010, there will be more infrastructure projects in the pipeline which require a considerable amount of foundation works and this bodes well for the group.

[millionairemind]

May 20, 2010, 6.41 pm (Singapore time)

CSC's Q4 net profit falls 14.6%, FY2010 down 40%

By ANGELA TAN

CSC Holdings Limited reported on Thursday net profit for the fourth quarter ended March 31, 2010 fell 14.6 per cent to S$5.71 million.

As a result, full year profit fell 40 per cent to S$24.07 million.

Revenue for the quarter was down 45 per cent at S$61.07 million, while revenue for the full year fell 50 per cent to S$285.06 million.

CSC said it recently secured projects in excess of S$120 million in the infrastructure, residential and industrial sectors in 4Q10. These projects expected to contribute more significantly to the subsequent quarters.

The group has recommended a one-tier final ordinary dividend of 0.40 cents per share, up from 0.37 cents a year ago.

[winston]

Not vested. From DMG:-

CSC (BUY, TP: S$0.265)

Year-to-date, CSC has won contracts providing foundation works for four out of 12 MRT stations along the new Bukit Timah Line (DTL 2) – King Albert Park, Sixth Avenue, Stevens Road and Tan Kah Kee stations.

Work on the above is expected to be completed by 1H2011.

Order books surged from S$127m in Feb to S$180m in Aug with various contract wins.

CSC is Singapore’s largest foundation and geotechnical engineering specialists and
the region’s leading ground engineering solutions provider for private and public sector work.

As the only local diaphragm wall specialist and a leading large diameter bored pile specialist in Singapore, we expect CSC to be able to secure more projects as contracts from the upcoming DTL 3 continue to be rolled out.

We estimate that tender results for DTL3 would be known by end 1Q2011.

[winston]

Not vested

CSC Holdings said it has secured more than S$60 million worth of foundation and geotechnical engineering contracts in the last two months.

Source: Reuters

[behappyalways]

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