CIMB exit pulls down Muhibbah shares

KUALA LUMPUR: Muhibbah Engineering (M) Bhd shares fell the most in more than a year after CIMB Bank Bhd withdrew support for a proposed scheme to restructure Asia Petroleum Hub (APH) project.

Muhibbah is a contractor of the project, which involves the building of an oil terminal in Johor.

The stock fell by as much as 19 sen, or 15.8 per cent, to RM1.01. It closed 18 sen lower, or 15 per cent, to RM1.02 yesterday, with more than 31.2 million shares traded.

"This is a negative surprise as we expected the restructuring scheme to be concluded in the second half 2012.

"The restructuring was at the proof of debt stage in first quarter 2012. We gather that the main reason for the change of course is the unresolved land lease agreement for the 99-acre site for the APH project," CIMB Investment Bank said in a report yesterday.

The firm explained that as the transfer of land ownership from the federal government to APH is still unresolved, bankers were unable to use the land as collateral, which means that APH cannot get refinancing and new funds.

The research house downgraded Muhibbah to a "trading sell" from "trading buy" on growing expectations that the marine engineering specialist would have to make provision for APH bad debts this year.

It now has a target price of 94 sen, substantially down from the RM1.50 target price previously.

"We were too optimistic on the APH talks and are disappointed that no solution has been achieved," CIMB Investment said.

It added that Muhibbah may turn in losses for the financial year ending December 31 2012 if the estimated RM400 million provisions are made.

As at end 2011, Muhibbah owed RM395 million to AHB for infrastructure works done. It has not made any provisions for its receivables which are unsecured.

Read more: CIMB exit pulls down Muhibbah shares http://www.btimes.com.my/articles/ibah-23/Article/#ixzz1z2jr5H1G

Masteel to supply steel bars to Dutch firm

Malaysia Steel Works (KL) Bhd (Masteel) will supply 270,000 tonnes of steel bars and steel billets, worth RM500 million,
to Amsterdam-based Trafigura Pte Ltd.

Managing director Datuk Seri Tai Hean Leng said the three-year supply was expected to commence in the second half of the year.

"Masteel has been most fortunate to be selected as one of Trafigura's major suppliers of steel products for its Asia Pacific customers.

"With this agreement, we are able to comfortably utilise our upstream and downstream capacities that will come onstream in the next two years," he told reporters after the signing ceremony to facilitate the supply.

The agreement was inked by Tai and Managing Director of Trafigura, Dominic Watters, and was witnessed by Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan.

Trafigura is the world's second largest independent trader of bulk and non-ferrous minerals and has investments in industrial assets around the world.

The company established its regional hub in Singapore last year and to-date, has invested significantly in Malaysia, including in oil terminals and metal warehouses in Pasir Gudang, Johor and a metals warehouse in Port Klang.

Tai, who is also chief executive officer, said Masteel was continuously expanding its production capacity with its upstream production poised to grow by 50,000 tonnes to 600,000 tonnes next year.

"We are also investing about RM95 million to construct a new downstream factory, adjacent to our existing upstream meltshop facility, in Bukit Raja.

"The downstream business which produces steel bars will have its production capacity increased by another 200,000 tonnes and complement the existing output of 350,000 tonnes from our steel mill in Petaling Jaya.

"The construction of the plant is expected to start in the second half of the year and will take approximately 18 months to complete," Tai added.

In a related development, he confirmed that Masteel was in the midst of bidding for steel jobs under the Klang Valley MRT project, estimated to be worth between RM2 billion and RM3 billion.

If successful, the contract would keep the company busy for up to four years. -- BERNAMA

ViTrox unfazed by moderate growth this year

KUALA LUMPUR: ViTrox Technologies Sdn Bhd targets to achieve revenue of RM500 million in 2015 despite seeing moderate growth this year.

President and chief executive officer Chu Jenn Weng told Business Times that despite the gloomy global economy, the company continues to expand its market reach and increase the number of its customers worldwide, especially in the US and China.

For the last five years, he said, the company has enjoyed a compounded annual growth rate of more than 30 per cent.

ViTrox is a cutting-edge solutions provider of innovative, advanced and cost-effective automated vision inspection system and equipment for the semiconductor and electronic packaging industries.

Founded in 2000, 90 per cent of its products were exported to multinational companies overseas in China, Taiwan, Thailand, the Philippines, Indonesia, Hungary, Morocco and Australia.

Chu said in the long run the company plans to expand its market reach worldwide, invest heavily on its research and development (R&D) develop new products and hire more employees to conduct its R&D.

"We know that good talent is not cheap. So that is why we are willing to invest on them in order to keep them," he said while adding that finding the right talent is challenging for ViTrox since it is still not known to many yet.

"We want to expand our business, participate in exhibitions, trade shows as well as Smidex Award so that more people know us. With that we hope that we would be able to get better talents," he said.

A positive workplace environment is one of the company's strength, said Chu while adding that employees are encouraged to be innovative and creative as well as maintain the open communication environment between employees and the management.

"We have a very open environment and good culture where our employees feel strong passion to make positive difference as a local company. We have a dream to grow the company to a world leading company. We have a dream to make ViTrox one of the best innovative companies in the world," he said.

Source: http://www.btimes.com.my/Current_News/BTIMES/articles/smevit/Article/

 

Nam Cheong jumps on contract win

Written by Reuters    Thursday, 21 June 2012 10:00 Shares of Singapore-listed Malaysian offshore vessel builder Nam Cheong surged as much as 13.7% to a seven-week high after it said it was awarded a letter of intent for projects worth US$130 million ($165 million). By 9:34 a.m., Nam Cheong shares were 10.7% higher at $0.186. Around 9.8 million shares changed hands, 5.7 times its average daily volume over the last five sessions. The letter of intent was to build four multi-purpose platform supply vessels, which will bring Nam Cheong’s order book to 874 million ringgit ($352.26 million), surpassing last year’s order book of 638 million ringgit, said AmFraser Securities. “Nam Cheong is one of our top picks in the offshore and marine sector, with exposure to Malaysia’s booming oil & gas scene,” said AmFraser in a note. The brokerage has a buy rating on Nam Cheong, with a target price of $0.28.

OCBC cuts Golden Agri target price

Written by Reuters    Thursday, 14 June 2012 12:01

OCBC Investment Research has cut its target price on shares of palm oil company Golden Agri-Resources to $0.74 from $0.77 and kept its buy rating, on expectations of lower crude palm oil (CPO) prices. By 9:25 a.m., Golden Agri shares were down 1.5%, and have fallen nearly 10% so far this year, compared to the Straits Times Index’s 5% gain. OCBC is lowering its CPO assumptions for this year to US$925 ($1,186) per tonne from US$1,000 per tonne, citing ongoing uncertainty in the euro zone, sluggish economic growth in the United States and in China. The broker has cut its 2012 forecast for the company by 3%, as lower CPO prices will have a bigger impact on plantation owners such as Golden Agri.

Wednesday June 13, 2012

Yinson eyes more Vietnam jobs

By ZAZALI MUSA
zaza@thestar.com.my

JOHOR BARU: Yinson Holdings Bhd is eyeing more oil and gas (O&G) jobs in Vietnam in the coming years after winning a US$737.3mil (RM2.35bil) contract there.
Chairman and managing director Lim Han Weng said Vietnam's O&G downstream activities were the most active in the region, hence provided good opportunities for the company.
He said petroleum-related projects worth US$400mil would be in the offing in Vietnam within the next two or three years and the company wanted to secure some of the jobs.
Lim said the projects in the pipeline mostly involved production, storage and offloading (PSO), and floating production, storage and offloading (FPSO).
“We want to focus in Vietnam and build our presence there before looking at other countries in the region,'' he told StarBiz over telephone yesterday.
Lim said the company would give itself two years from now before venturing into Malaysia and Indonesia as both countries offered good prospects in the O&G sector.
He said partnering with PetroVietnam Technical Services Corp (PTSC) gave the company an added advantage but stressed that it did not get special treatment in securing the O&G jobs.
Lim added the tendering process was done professionally and transparent and the awarding of the contract was given to parties with expertise and capabilities to execute the job.
PTSC's parent company PetroVietnam is a 100% state-owned entity that is authorised to deal with all petroleum-related matters in Vietnam.
Yinson and PTSC had on Monday secured the US$737.3mil O&G job in Vietnam from Lam Son.
Lam Son is a 50:50 joint entity between Vietnam's oil major PetroVietnam and Petroliam Nasional Bhd.
In a filing with Bursa Malaysia, Yinson said it had entered into a consortium agreement with PTSC in relation to execution and performance of engineering, procurement, construction and installation contract and bareboat charter deal.
It said the consortium had negotiated with Lam Son for a FPSO.
“Securing the new job is a testimony that we are ready to become one of the prominent players in the O&G sector in the region,'' said Lim.
He said initially, when the company ventured into the O&G segment, it faced difficulties getting funds from the banks as they had no confidence in the business.
Lim said Yinson had to look for financial assistance from banks in Singapore and was successfully in getting loans at lower interest rates.

 

Maybank Kim Eng raises Ezion target

Written by The Edge

Tuesday, 12 June 2012 12:05

Maybank Kim Eng raised its target price on Ezion Holdings to $1.38 from $1.35, while keeping its ‘buy’ rating, after the oil and gas services firm won a US$86.3 million ($111 million) service rig contract.

Ezion shares were down 1.9% at $0.795, underperforming the 0.8% drop in the FT ST Small cap Index. The stock has risen about 20% so far this year.
Maybank raised its net profit forecasts for Ezion’s 2013-2014 fiscal years by about 5% to factor in the firm’s new contract, believed to be from Mexico’s Pemex. The broker estimated the project would add US$7 million per annum to Ezion’s net profit over the 2013-2016 fiscal years.

Ezion is also gunning for a third Australian liquefied natural gas marine logistics contract and the tender results are likely to be known by next month, Maybank said.

While Ezion’s gearing is set to rise to fulfill the estimated capital expenditure of US$450 million this year, Maybank said the strain on the balance sheet should ease as operating cash flows increase on the deployment of its units.

The broker said Ezion was the cheapest offshore and marine stock under its coverage, while offering one of the strongest earnings growth potential at a 33% compound annual growth rate over the next three years.

Kreuz wins $182m in subsea contracts

Written by The Edge

Tuesday, 12 June 2012 17:20

Kreuz Holdings, the subsea service provider for the oil and gas industry, today announced that it has won a string of contracts worth US$142 million ($182 million) from the Swiber Group for subsea installation works, as well as from another third-party client for the provision of Remotely Operated Vehicle (ROV) services. These services, which are to be performed largely in Southeast Asia, are scheduled to start in the third quarter of 2012 with completion expected in the fourth quarter of 2013.

Yinson's earnings from oil and gas

Yinson's earnings from oil and gas set to quadruple to 85% of its profit

PETALING JAYA: Last week, reports and rumours were swirling that oil and gas provider Yinson Holdings Bhd, together with its Vietnam partner PetroVietnam Technical Services Corp (PTSC), were extremely close to securing a US$500mil (RM1.6bil) job from Lam Son.
Lam Son is a joint entity of Vietnam's oil major PetroVietnam and Petroliam Nasional Bhd. PetroVietnam is PTSC's parent company which is a 100% state-owned entity that is authorised to deal with all petroleum-related matters in Vietnam.
The joint venture set up between PTSC and Yinson are said to be 51% and 49% respectively.
At Yinson's current orderbook size of some RM1.25bil, this contract would bring its orderbook closer to the RM2bil region.
Reports have indicated that the contract is for a period of seven years with an option to renew it for another three years. It entails supplying Lam Son an FPSO (floating production, storage and offloading) vessel.
For a fledging little company like Yinson, this certainly is a coup. Last December, together with PTSC, Yinson had piqued investors' interest when it won a RM1.01bil contract from Vietnam's oil major to supply a FSO (floating storage and offloading) vessel with a 20-year charter contract.

Yinson’s headquarters in Johor Baru. The small company attracted investors’ interest last December when it, together with PTSC, won a RM1bil contract from Vietnam.

This FSO is jointly-owned with Vietnam's National Oil Company and is currently being built in Sundong shipyard, South Korea.
It is expected to be delivered some time next year.
For a Malaysia-based logistics and building materials company, Yinson's shift in strategy to oil and gas has been increasingly apparent in the last two years.
Before winning these big contracts, it had on its own won an RM87.5mil platform supply vessel (PSV) charter contract in May 2010 and a RM75mil anchor handling tug supply (AHTS) charter contract in June 2011.
Both are deployed for PetroVietnam's offshore operations on seven-year charters.
For the oil and gas segment, Yinson has four core divisions and is predominantly involved in offshore marine services, commodity trading, logistics services and port operations.
For the PSV which is of 3,000dwt (deadweight tonnage), Yinson has a seven-year contract commencing from August 2010 to August 2017 to bareboat-charter the PSV for PetroVietnam's offshore projects from US$27mil (RM80mil) over the contract period.
“The day rate is respectable at US$3.50 per dwt, and we estimate Yinson will earn about RM7mil in net profit per anuum,” said Maybank Research.
Meanwhile, the AHTS which is of 5,000bhp (boiler horsepower) is also contracted for seven years beginning from July 2011 to July 2018 for more than US$20mil.
“The bareboat charter has a reasonable day rate of US$1.43 (RM4.43) per bhp. Yinson should make about RM5mil in net profit per annum from this vessel charter,” said Maybank.
Last July, Yinson acquired a 40% stake in the Southern Vietnamese port of Phu My for RM26.4mil. PTSC is its partner with the remaining 60% stake.
“While only breaking even now, we foresee the port operations to become the group's next earnings driver in Vietnam after the marine segment,” said Maybank Research.
Yinson is also involved in commodity trading such as vessel supplies for fresh water, hydraulic fluids, marine gas and oil among others. For its logistics services, the group offers trucking services, which has now been realigned to support units for its oil and gas activities.
Prospects in Vietnam are looking good, with an anticipated rollout of seven offshore projects between 2012 and 2014 that will require floating solutions such as an FPSO, FSO or a mobile offshore production unit.
Maybank Research said the fields which have been identified as potential prospects for floating solutions are Lam Son, Gau Chua-Ca, Ham Rong, Chevron's Block B, Dai Nga, Block 102/106 and Lac Da Vang.
For its financial year ended Jan 31, 2012, Yinson posted a 47.61% increase in net profit to RM27.37mil on the back of a 11.7% increase in revenue to RM15.82mil.
Based on its existing operations, Maybank Research said earnings contribution from the oil and gas division was set to quadruple, from 26% of group net profit for its financial year (FY) ended Jan 31, 2012 to 85% in FY14.
Last month, it raised some RM20.4mil after completing its private placement of 12 million shares.
Maybank is forecasting Yinson to deliver net profit growth of 25% to RM31mil in FY13, a 44% growth to RM45mil in FY14 and a 29% growth to RM58mil in FY15.
This implies a three-year net compounded growth of 32%.
“Growth in FY13 will be driven by its two new vessels coming onstream in the coming months, while FY14 will see a maiden contribution from its FSO operations.
“Overall, Yinson will enjoy the full-year effect contributions from these three newbuilds in FY15.
“We estimate the two OSVs will add a combined RM7mil to RM15mil per annum to net profit while its FSO will add between RM15mil and RM27mil per annum based on its 49% stake,” said Maybank Research.

Swiber soars on contract wins

07-06-2012 - Swiber soars on contract wins
Shares of Singapore’s Swiber Holdings rose as much as 9.7% on Wednesday to a three-week high after the offshore services firm said it had been awarded projects worth a total of US$830 million ($1.06 billion) in Asia and the Middle East.

By 11:25 a.m., shares of Swiber were up 7.8% at $0.555 with 8.6 million shares changing hands, about thrice the average volume traded over the past five sessions.
Swiber’s contract wins increase its order book to US$1.8 billion, CIMB Research said in a report.

Swiber will fare better this time in the face of the euro zone crisis and falling oil prices compared to the global financial crisis in 2008, due to secure earnings visibility till the end of 2013, CIMB said.

UOB raises Ezion target to $1.42

Written by Reuters

Thursday, 07 June 2012 12:22

UOB Kay Hian raised its price target on Ezion Holdings to $1.42 from $1.34 after it said the offshore services provider won a third service rig contract from Mexico’s Pemex.

Ezion shares were up 0.65% at $0.780 at 9:45 a.m., the FT ST Small Cap Index edged up 0.3%. The stock has risen 19% so far this year, outperforming a 6% gain in the index.
The charter contract is for four years with total revenue at US$86.3 million ($110 million) or US$21.6 million per year, and UOB estimates the project to yield a net profit of US$7 million, adding 7% to its 2013 and 2014 earnings forecast.

The project also has a “very high” return on equity (ROE) of 42%, well above Ezion’s minimum project ROE requirement of 30%, said UOB and kept its ‘buy’ rating on Ezion.

The broker expects Ezion’s share price to benefit from a ramp-up in earnings as more liftboats and service rigs come onstream and demand is seen strong.

SGX - Jun 2012

04-06-2012 - DBS Vickers starts Kreuz with buy rating 
DBS Vickers initiated coverage of Singapore offshore marine services provider Kreuz Holdings with a ‘buy’ rating, citing attractive valuations and a positive outlook for order flow.

Kreuz shares were up around 2% at $0.26, outperforming the FT ST Small Cap Index which was down 1.7%. Kreuz shares have fallen nearly 19% so far this year, compared to a 4% rise in the index.
DBS said its target price of $0.43 is pegged at six times Kreuz’s 2012 fiscal year earnings, which it said is at a “conservative” 10% discount to the firm’s Singapore-listed small-cap offshore services peers.

The buoyant offshore market is likely to drive good order flows for Kreuz, leading to a compound annual growth rate of 15% for 2011-2013 fiscal year net profit, said DBS, adding that catalysts should come from new order wins in the near term.

Source:http://www.theedgesingapore.com/the-daily-edge/business/37860-dbs-vickers-starts-kreuz-with-buy-rating.html