Tuesday, March 11, 2008

Yongnam clinched S$70 million contract in Delphi

Yongnam announced a contract stating that they won a S$70 million structural steel contract in Delphi. The contract is to build Delphi international airport terminal building and is expected to have favourable material impact on FY2008 earnings.

This contract is significant not only because of its size, but more because of the significance of breaking into a new market - India.

I mentioned in my last post on Yongnam that its order book as at 31 Dec 2007 amounted to $162 million compared to $147 million as at 31 Dec 2006. Without counting the writeback impairment of 12.8 million, an equivalent total contract size of $38 million will make the net earnings equal to FY07. It's a rough figure, because I realised that not all the earnings from the contract will be realized in FY08. But having won S$70 million, I can look forward to a better FY08 results at this early start to Yongnam's FY08.

This brings the total order book for Yongnam on 11th March to be S$232 million.

With another S$181 million contracts, Yongnam can possibly beat FY07 earnings even with the write-back included. Let's see how it all works out.