ASL Marine

[winston]

Not vested. From DMG:-

ASL Marine: A record FY08 (BUY\S$1.04\Target S$1.56)
Serene Lim (62323897, [email protected])

Record FY08 earnings. ASL Marine (ASL) delivered a stellar set of FY08 results, well within
our full year estimates. Revenue rose 26% YoY to S$400.4m with growth across all three core
divisions: shipbuilding (+21%), shiprepair (+57%), shipchartering (+22%). Gross profit surged
39% YoY attributed to progressive recognition of more and higher value shipbuilding contracts
undertaken (+47%), increased number of higher value shiprepair and ship conversion jobs
(+99%) as well as expanded fleet size for ship chartering (8%).

Gross profit margins recorded improvements for shipbuilding (190 bps to 10.3%) and shiprepair (650 bps to 31.1%) but lower margins for shipchartering (-390 bhps to 29.9%) due to lower utilisation rate and higher bunker fuel cost. In view of the record results, ASL is proposing a total dividend of 4 S¢ per share from a payout of 20%, translating into a dividend yield of 3.8%.

Rough seas ahead? The management guided that 48% of ASL’s orderbook of S$693m as at 30 Jun 08, or S$333m, would be recognised in FY09. The remaining S$360m would be
recognised in FY10 and beyond. While this should provide short-term relief, we remain,concerned as ASL’s long-term fundamentals which could be marred by a capacity glut in the offshore transportation industry. Nonetheless, the management noted still healthy enquiries for the offshore support vessels, with strong demand stemming from the Middle East and India.

Outlook for shiprepair continues to remain positive underpinned by tight global yards’ capacity crunch and stringent maritime regulations fuelling more conversion jobs. ASL is currently expanding its existing graving drydock and adding two new ones to accommodate repair works of larger vessels. We believe only the ship chartering division may face further margins compression when an influx of new vessels (particularly AHTS) enter the market in 2009, coupled with higher bunker fuel and labour costs.

Strong balance sheet to stomach high capex. The major capex for FY09 include the
enhancement of ASL’s shipyard capabilities (total investment amounting to S$30m) and fleet
expansion plans totalling S$67m. We estimate FY09 capex to be approximately S$100m which
ASL could easily fund through its strong operating cashflow and/or debt financing, based on its
low current net gearing ratio at 0.14x.

Nonetheless, with a strong balance sheet, we believe the S$300m Multicurrency Debt Issuance Programme established on 7 May 08 is a prudent effort from the management to preserve cash and explore additional financing source.

Ascribing lower valuation parameter amid weak market sentiment, thus reducing target
price. Pending the outcome of the divestment of ASL Energy, we are keeping to our forecast
that ASL would record a one-time gain of S$9.6m in FY09. We have also introduced our FY10
estimates and rolled over our valuations to FY09F recurring EPS.

We have pegged our valuation parameter of 6.85x (an average of its Singapore and Malaysia peers) from 8.5x previously as a result of sector de-rating, deriving a target price of S$1.56 (from S$1.83 previously). We believe the potential upside of 50% over ASL’s yesterday’s closing price provides a good buying opportunity into a company with prudent and quality management, strong balance sheet and clear business direction. Maintain BUY.

[winston]

ASL MARINE ASL Marine Holdings has secured new shipbuilding and fabrication contracts worth S$101 million ($69.70 million).

[winston]

From DBS:-

ASL Marine’s yard remains busy with numerous shipbuilding and repair jobs. The group’s capacity expansion program is on track, and when completed by 2Q2009, would expand ASL’s ship repair capacity by c. 70%.

However, amid the protracted global credit crunch and increasingly uncertain outlook for future demand, shipbuilding order flows may begin to slow from FY10 onwards.

Maintain Buy but target price reduced to S$ 1.00 (Prev S$ 1.67).

[winston]

ASL Q1 net profit up 80% to $23.9 mln
By WONG WEI KONG

ASL Marine Holdings Ltd, which owns shipyards in Singapore, Batam (Indonesia) and Guangdong (China), announced on Friday a 80 per cent increase in net profit to $23.9 million in its first quarter ended 30 September 2008.

The group's total revenue increased by 27 per cent to $118.6 million against the backdrop of higher revenue growth in all the three business segments.

The increase is primarily due to the progressive recognition of more and higher value shipbuilding contracts undertaken, increased number of higher value shiprepair jobs undertaken and the increase in ASL Marine's fleet size for shipchartering.

[winston]

Not vested. From DBS:-

The rewards of diversification

ASL’s diversified revenue base should help it weather any slowdown in shipbuilding orders, with its ship repair and chartering businesses continuing to experience sustained demand. Balance sheet remains strong with low net gearing. ASL also offers an
attractive dividend yield of c. 11%. Maintain BUY.

Diversified revenue base. Despite concerns of a slowdown in shipbuilding orders in the near term amid the global credit crunch, we continue to like ASL for its diversified revenue base which stems from its business model as an integrated marine services group providing shipbuilding, ship repair/conversion, as well as ship chartering services.

Sustained demand for repair and chartering services. Indeed, ASL continues to experience sustained robust demand for its higher-margin ship repair/conversion services, reporting greater volume of higher value repair jobs performed over the last two quarters. Going forward, ASL’s strategic ramping up of its ship repair capacity should allow it to undertake
more repair jobs, and should buffer against any slowdown in shipbuilding orders. Also, the group’s charter fleet continues to experience meaningful utilisation as regional demand from dredging, land reclamation and marine construction sectors remains
stable.

Visible earnings, strong balance sheet. Earnings visibility is backed by ASL’s large order book of S$706m, coupled with sustained demand for ship repair and chartering services. Balance sheet remains strong with current net gearing of 0.15x, and is expected to be in a net cash position by end FY09. Key risks continue to be order book cancellation and deferral of non-critical repair work. TP remains at S$0.84.

[millionairemind]

Published February 12, 2009

ASL Marine's Q2 earnings up 10.6%
H1 profit up 43.7%, boosted by better performance and disposal gains

By VINCENT WEE

ASL Marine registered a 10.6 per cent rise in net profit to $16.3 million for the second quarter ended Dec 31, 2008. But for the first six months, net earnings rose at a faster pace of 43.7 per cent to $40.2 million, helped by better operating performance and disposal gains.

Revenue for Q2 rose 7.7 per cent to $107.7 million. But H109 revenue was 17 per cent higher at $226.3 million on rises in all three business segments of shipbuilding, repair and conversion and chartering.

'Other operating income' for H109 rose $9.3 million to $14.5 million, mainly on gains from the sale of 14 vessels as part of the group's fleet renewal programme and miscellanous income of $7.7 million that mainly comprised a gain of $6.6 million from disposal of vessels held for sale.

By segment, shipbuilding revenue rose 18.2 per cent to $138.6 million while gross profit increased 9.1 per cent to $13.5 million in H109. Revenue from the shiprepair and conversion segment improved by 11.4 per cent to $36.3 million and gross profit was 13.4 per cent higher at $11.6 million due mainly to higher value jobs undertaken. Shiprepair revenue, however, fell $6.5 million or 32.9 per cent in Q2 '09 due to fewer ship conversion jobs as compared to the previous corresponding quarter.

ASL's charter fleet stood at 178 vessels as at Dec 31, 2008, and revenue from shipchartering operations rose 18.3 per cent ($8 million) to $51.5 million in H1 '09 with more vessels in the fleet and higher proportion of time charter during the period. Gross profit margin improved to 32.2 per cent from 30.9 per cent which lifted the gross profit 23.2 per cent to $16.6 million.

Net orders from external customers stood at $663 million as at December 31, 2008, for delivery up to FY2011 and about 26 per cent of this order book is expected to be recognised in the second half of FY09. These contracts comprise building of 42 vessels, including offshore support vessels such as heavy life and pipe-laying vessels, subsea operation vessels, tugs, self-propelled cutter suction dredgers and others. In addition, there are further orders of about $58 million to build nine vessels for companies from within the group.

The group's on-going strategy has been to focus more on the less cyclical shiprepair segment. 'The group is cautiously optimistic of the longer term outlook of the shiprepair operations which is underpinned by the increasing world fleet and the enhanced docking facilities at its Batam yard,' ASL said. Its Batam yard is currently lengthening its 150,000 dwt graving dry dock from 260 metres to about 360 metres to cater to larger vessels and works have also commenced for two additional dry docks for medium-sized vessels.

'Amidst the fast deteriorating economic downturn, the group would utilise all means and resources available to ride out the difficulties ahead,' said managing director Ang Kok Tian.

ASL shares closed one cent higher at 45 cents yesterday.

[winston]

Not vested.

DBS Research expects ASL Marine to report 3Q09 headline net profit of around S$20m on 11 May ’09.
Results will be mainly buoyed by large disposal gain. We raise ASL’s fair value to S$0.94 (Prev S$ 0.84). We
continue to like ASL for its cheap valuation at 4.1x forward PE and 0.9x P/B, diversified revenue stream, and
low net gearing of 0.2x currently.

Also, outstanding order book of S$663m provides some degree of earnings visibility to FY11. Maintain BUY

[winston]

Not vested. From DBS:-

Downgrade ASL Marine to HOLD, with TP maintained at S$0.94. 3Q09 headline net profit of S$23.4m was ahead of expectations but results were buoyed by larger than expected disposal gain.

Operating profit was weaker than expected, mainly due to weaker gross margins on the ship repair business and a relatively large provision made for doubtful debts.

Balance sheet remains strong with net gearing of 0.17x, expected to dip to 0.14x by end FY09.

[millionairemind]

Published May 12, 2009

ASL Marine Q3 net profit up 65% at $23.4m

By NISHA RAMCHANDANI

ASL Marine Holdings saw net profit surge 65 per cent to $23.4 million in its third quarter ended March 31, while revenue grew 16.6 per cent to $106.9 million on the back of stronger contributions from its shipbuilding and shipchartering operations.

Other operating income rose mainly due to a gain of $12.2 million in the disposal of its jointly controlled entity, ASL Energy.

Shipbuilding rose from $56 million in Q308 to $71.1 million in Q309 and shipchartering increased from $21.25 million to $23.27 million. However, shiprepair revenue was $1.9 million lower at $12.47 million, mainly due to partial utilisation of the dry docking facility for shipbuilding activity during the quarter, the group said.

For the quarter, earnings per share rose to 7.8 cents, up from 5.18 cents.

For the nine months ended March 31, 2009, net profit jumped 50.9 per cent to $63.6 million, while revenue was up 16.9 per cent to $333.2 million.

As at March 31, the shipbuilding order book stood at $582 million, stretching to the financial year ending June 30, 2011. The group's fleet size was 188 vessels versus 175 vessels a year ago. It plans to increase its shipchartering fleet by taking delivery of eight vessels worth about $89 million, of which three vessels have committed charter. Of the eight vessels, six vessels, valued at $86 million, are being built internally.

But future demand for shipbuilding remains weak, said ASL Marine. So 'the group will continue its focus on strengthening project execution on the existing order book, tightening cost control and cash-flow management whilst seeking to make selective investments and exploit strategic opportunities in related businesses'.

Barring unforeseen circumstances and fair value provisions, the group does not expect Q409 earnings to be as high as Q309, since Q309 had a one-off gain. ASL Marine gained three and a half cents to close at 88.5 cents yesterday.

[millionairemind]

August 20, 2009

ASL Marine Q4 net profit down 59%
Group hit by $3.2m impairment loss on vessels; revenue falls 11% to $102m

By JAMIE LEE

ASL Marine Holdings posted yesterday a sharply reduced quarterly net profit due to an impairment loss on vessels.

Sales from ship-building - ASL's biggest revenue component - dropped 15.2 per cent while revenue from ship-repair and other marine-related services dipped 3.2 per cent

The marine services company registered a 58.7 per cent fall in net profit for its fourth quarter ended June 30 to $7.49 million, from $18.1 million a year back.

The result translates to earnings of 2.5 cents per share, down 58.5 per cent from 6.03 cents per share previously.

This was due to a $3.2 million impairment loss on vessels, booked under 'other operating expenses'.

Total operating expenses were $3.55 million, significantly higher than $629,000 previously.

Revenue fell 11.4 per cent to $102 million, from $115 million a year earlier, with lower sales across all business units.

Sales from ship-building - ASL's biggest revenue component - dropped 15.2 per cent to $60.1 million, from $70.9 million.

This was mainly due to certain projects in process that have yet to reach the '10 per cent recognition threshold during the period', the company said.

Remaining sales - split between ship-repair and other marine-related services and ship chartering and rental - fell less drastically.

Revenue from ship-repair and other marine-related services dipped 3.2 per cent to $20.6 million from $21.2 million a year earlier.

Sales from ship chartering and rental slipped 7.5 per cent to $21.5 million from $23.2 million, mostly due to lower vessel utilisation rates and higher trade discounts to customers.

Gross profit for the quarter was $19.1 million, down 1.6 per cent from $19.4 million previously.

Gross profit margin for ship-building stands at 10.4 per cent, which is less than half of the margins from ship-repair and marine-related services and ship chartering. These stood at 33 per cent and 28.2 per cent respectively.

ASL has proposed a dividend of four cents a share for the quarter, comprising a final dividend of three cents a share and a special dividend of one cent a share.

For the full year, the company posted a net profit of $71.1 million, up 17.9 per cent from $60.3 million in fiscal 2008.

Earnings per share rose 12.3 per cent to 23.68 cents, from 21.09 cents posted the year before.

Revenue rose 8.7 per cent to $435 million from $400 million, boosted by higher sales from ship-building. Revenue from this unit rose 10.5 per cent to $270 million from $244 million a year earlier.

ASL Marine's shares hit a 52-week high of $1.08 yesterday before retreating to $1.03 at the close, down three cents or 2.83 per cent.