Rotary Engineering profit up 218% to $13.8mln

Company upbeat strong industry fundamentals and rising opportunities in Oil & Gas sector will sustain growth.

Mainboard-listed Rotary Engineering Limited (Rotary) has posted net profit after tax and minority interests (PATMI) of S$13.8 million in its fiscal 2010 first quarter ended 31 March, up 218.4% from its previous corresponding quarter. The Group also turned in record revenues of S$179.7 for the quarter, an increase of 36.3% from previously. For the period under review, the Group maintained its gross profit margin of 18%.
Earnings per share stood at 2.4 cents for the three months to 31 March 2010 against 0.8 cents in the same period last year, up 200.0%.

Rotary is a leading provider of engineering, procurement, construction and maintenance services specialising in the Oil & Gas and Petrochemical industries.

As at 31 March 2010, the Group's order book is a healthy S$1.1 billion, of which more than 80% originates from outside Singapore with projects continuing to the end of 2012.

Rotary's largest contract to date is the US$745 million (about S$1.1 billion) Engineering, Procurement and Construction (EPC) contract awarded by Saudi Aramco Total Refining and Petrochemical Company (SATORP), to build a refinery tank farm at Jubail, Saudi Arabia.

Mr Chia Kim Piow, Chairman and Managing Director, said that Rotary will continue to keep a keen eye on controlling costs to ensure alignment with revenue growth and the current level of business activity. "We are executing with both operational and financial discipline, at the same time making strategic and focused investments, to spur future growth in our core businesses," he added.

The Group's financial position remained strong. Its total assets were S$581.6 million and net tangible assets amounted to S$271.1 million. As at 31 March 2010, Rotary is in a net cash position of S$129.1 million with positive net working capital of S$168.8 million. Total debt-to-equity ratio remains low at 1.6% as at 31 March 2010. Shareholders’ equity of S$261.4 million is an increase of 5.8% or S$14.4 million higher than that recorded at 31 December 2009. Net asset value per share of 46.0 cents was 5.8% or 2.5 cents higher than at 31 December 2009.

Mr Chia said the long-term outlook for the Oil & Gas sector appears promising. "There’s a considerable level of interest and business activity in the market and our interaction with industry players indicates an optimistic outlook," he said.

In the near term, Rotary will continue to develop existing territories in Asia while driving its business development efforts beyond Saudi Arabia to include the Gulf Cooperation Council (GCC) countries in the Middle East. The GCC countries consist of Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and the Sultanate of Oman.