Thursday, February 14, 2008

Swiber LOI; Pac andes 3Q results

Quite a few news to announce:

1. Swiber was awarded LOI for US$35 million project in offshore Indonesia. This latest LOI represents an extension of a contract awarded to Swiber in Nov 07 for a major international oil conglomerate based in Indonesia. Altogether, the 2 contracts is worth abot US$66 million in all.
If I didn't remember wrongly, this is the first contract awarded since the start of year 2008. More to come pls! Price rebounded up to close at 2.120.

2. Pac andes and china fishery posted results. Pac andes 3Q results is quite excellent.

Revenue for 3Q: up 52%
Gross profit for 3Q: up 104.1%
Net profit after tax: up 119.3%
PATMI: up 153.4%

What is even better is comparing the for a 9 month period in 07 and 08:

Revenue: -----9MFY08 --- 4,838 mil ------ 9MFY07 --- 2,984 mil
Gross profit : -9MFY08 --- 1,003 mil ------ 9MFY07--- 510.8 mil
PATMI: -------9MFY08 ---- 260.8 mil ------ 9MFY07--- 161.6 mil

Looking at the figures above, it's quite hard for Pac ands not to exceed last financial year's results.

Revenue segmentation by operation:

3QFY08 ----- 55% fishing division --------45% SCM
3Q FY07 ----- 37.4% fishing division -----62.6% SCM

I think most of the fishing revenue must have come from their increased stake in China fishery from 28.8% to 64.1%. But don't get wrong, SCM is growing very fine by its own accord.

Looking forward, the management had a few things to expect a great year ahead:

1. Continued rise in global demand for ocean-caught fish and fish products such as fishmeal and fishoil, esp in PRC market. Since PRC makes up 77.5% of sales in the 3Q reported, this should have direct relevance towards their bottomline. Basically it means that china fish will do well, which will contribute to Pac andes earnings too.

2. Frozen fish SCM business will see more growth too, esp since Pac andes is one of PRC's largest importers of ocean-caught fish. They plan to enlarge their self-owned transportation fleet to combat the global shortage of reefer vessel and rising freight costs. The group had doubled its transporation fleet from 2 to 4 vessels during the reporting period.

3. Expects to deliver a higher volume of fish catch in current fishing ground. With a new revenue stream in South Pacific Ocean in FY09, this will add more fishes since they now have more fishing grounds. 3 upgraded supertrawlers will be deployed for this new south pacific fishing ground.

4. Active negotiation to restructure the terms of the group's 4th VOA from a daily rental hire to a prepaid charter hire basis. This is to reduce the amount of charter hire payable on an annual basis.

More numbers:

EPS for 9 MFY08: HKD 0.2382
EPS for FY08 annualised (based on 9M): HKD 0.3176
EPS for FY08 (exchange rate of 0.182) : SGD 0.0578
Price per share (based on today's close) : SGD 0.495
P/E : 8.56

Saw that the debt to total assets ratio went from 49.6% to 44.0%. Hmm, almost half their assets are from debts, quite highly leveraged.