Here are three other offshore & marine (O&M) companies listed on the Singapore Exchange S68 (SGX): Dyna-Mac, ASL Marine and Jason Marine. Dyna-Mac and ASL Marine are mainboard listings while Jason Marine is listed on the Catalist board.
Among the three, Dyna-Mac is probably best known for its turnaround story with the unexpected passing of its founder, executive chairman and then-CEO Desmond Lim in October 2019. In FY2019 ended Dec 31, 2019, the company saw a net loss of $24 million, which deepened to a loss of $58.4 million a year later in FY2020 due to the Covid-19 pandemic.
All that changed when Lim Ah Cheng, the current CEO and executive chairman of the company, joined in March 2020. The year he took over, Dyna-Mac reported earnings of $5.6 million for FY2021.
In previous interviews with The Edge Singapore in June 2022 and May 2023, Lim shared that his first priority was to stabilise the company, sustain the necessary level of capital expenditure (capex) and maintain sound relationships with the company’s existing partners and customers. He also recalled the changes he introduced, which includes negotiating directly with the company’s potential clients by engaging them early instead of bidding for open tenders to win jobs. When he first joined the company, Lim also opted to channel the company’s funds into production and essential capex instead of non-essential expenditures such as office renovations.
In a June 19 interview with the Singapore Exchange’s (SGX) kopi-C: The Company Brew column, Lim attributed the company’s turnaround to his work ethic. “I chose to work very hard and lead by example. If you push hard to try and turn things around, the staff has to follow,” he said.
All these efforts made by Lim and his team seemed to have paid off. Since taking over the helm, Dyna-Mac has seen growth in its earnings. In FY2022, the company’s earnings surged by 138.6% y-o-y to $13.1 million due to higher revenue and gross profit. In FY2023, Dyna-Mac’s bottomline grew again by 118% y-o-y to $28.5 million due to higher revenue and gross profit thanks to the better use of its capacity.
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In 1HFY2024, Dyna-Mac’s earnings tripled y-o-y to $38.7 million, thanks to better productivity, revenue growth and the completion of major projects. Its net cash position rose to $307.7 million as at June 30, from $216.1 million as at Dec 31, 2023. The company also has zero bank borrowings.
In his latest report dated Aug 7, Maybank Securities analyst Jarick Seet hailed Dyna-Mac’s “explosive” and “spectacular” 1HFY2024 results as the company’s NPAT of $38.7 million surpassed his expectations at 66% of his FY2024 forecasts.
“As its orderbook has doubled to $896 million over the past year and as it has 50% more land, we expect Dyna-Mac to execute its orderbook at a faster pace. And as expected, it secured even higher margins than we expected for the new projects,” Seet writes.
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“Gross margin actually surged to 27.6% in 1HFY2024 from 13.5% in 1HFY2023, which justifies our positive stance on the robust floating, production, storage and offloading [FPSO] space accompanied by strong growth in revenue. Net orderbook remains at $681.3 million, which is sufficient for FY2024 as well as for FY2025.”
Keeping his “buy” call, Seet has raised his target price to 64 cents from 62 cents, making this the third increase in two months. The analyst has also raised his FY2024 and FY2025 patmi estimates by 3.6% and 3.7% respectively.
In its earnings release, Dyna-Mac says it intends to pursue growth through multiple channels including inorganic growth and strategic alliances with industry leaders.
“Despite the competitive environment, we are encouraged by a consistent stream of inquiries from both new and repeat customers, indicating sustained demand for our offerings in the foreseeable future,” adds the statement dated Aug 6.
Shares in Dyna-Mac have hit multi-year highs at 52 cents at the close of Aug 6. Since the start of the year, they have risen by around 80%.
Making waves
In 9MFY2024 ended March 31, ASL Marine reversed into the black with earnings of $5.5 million from a $7 million loss a year before as revenue and gross profit rose on a y-o-y basis. 9MFY2024 group revenue rose by 13.1% y-o-y to $270.1 million due to higher contributions from ASL Marine’s ship repair and ship chartering businesses. This was partly offset by lower contributions from the group’s shipbuilding business.
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In 3QFY2024, however, the company saw earnings decline 71.4% y-o-y to $4 million from $14 million as group revenue and gross profit fell y-o-y. Group revenue fell 10.6% y-o-y to $91.4 million due to lower contributions from ASL Marine’s shipbuilding business.
Gross profit for 9MFY2024 and 3QFY2024 stood at $35.6 million and $10.3 million, 140.4% higher y-o-y and 23.3% lower y-o-y respectively.
On July 24, ASL Marine allotted and issued 32.1 million new ordinary shares in the capital of the company after exercising the same amount of warrants at the exercise price of 6 cents per share on the same day.
The warrant exercise brings the total number of issued shares in the company to 990.4 million from 958.3 million previously. The rest of the 208.5 million warrants that were still outstanding expired on July 23.
Navigating new horizons
Jason Marine is a one-stop provider of marine electronics and communication services that range from electronics and energy solutions to marine equipment, satellite solutions and sustainable solutions.
On May 29, the company reported earnings of $92,000 in FY2024 ended March 31, 34.3% lower y-o-y. Revenue, however, rose 14.3% y-o-y to $34.7 million due to the increase from the company’s sales of goods and airtime segments and offset by the decrease in rendering of services segment. The increase in sales of goods segment mainly arose from the increase in activities under the company’s distribution business.
On July 20, in response to queries from the Securities Investors Association (Singapore) on the company overextending itself by scaling up operations in Spain, establishing a start-up in the Canary Islands and venturing into the Middle East at the same time, Jason Marine said it will only scale up when its markets are showing positive results.
“The expansion provides a new platform for revenue and margins expansion beyond its current markets,” it adds.
At present, it is in the “preliminary stage” of venturing into the Middle East. For the time being, the company will be working with its existing business partners in the region instead of having its own legal entity.
