3 trends expected to boost MTQ earnings in coming quarters

Near-term outlook looking particularly rosy.

OSK-DMG said that several positive broad trends are set to lift MTQ in the coming quarters.

These include better margins as MTQ's Bahrain unit turns profitable, lower overheads as cost-cutting goes on, and growing revenue and profits as drilling activities continue to rise.

For its upcoming 2QFY14 results though, OSK-DMG predicts revenue to lower q-o-q due to the conclusion of Neptune Marine's vessel campaign.

"However, we expect a slight gross margin rebound which should boost shareholders’ profit to about SGD5m," it noted.

"We expect profits to be stronger towards the later quarters as ongoing cost-cutting measures at NMS will begin to be reflected in its financials. This is in addition to the expected gross margin improvement in MTQ’s oilfield engineering services segment when its Bahrain facility turns profitable," it said further.

OSK-DMG said oilfield engineering revenue will rise on the back of a drilling rig surge in Asia, jumping to 193 at end-September from 175 at end-January. The number of rigs in the Middle East has also grown from 150 to 162 over the same period.