KS Energy's revenue jumped 41.7% to S$698

Thanks to its strong distribution business.

According to OCBC Investment Research, KS Energy reported a 41.7% increase in revenue to S$698.1m and a net profit of S$1.3m in FY12, vs. its forecast of a full year net loss of S$1.0m. 

OCBC adds, this compares to a net loss of S$78.8m in FY11. Revenue from the distribution business grew 32% to S$460.4m, accounting for 66% of total revenue.

Here's more:

Turnover from the drilling segment rose 76%, mainly due to the sale of the KS Java Star rig to a subsidiary of KSE’s jointly controlled entity, PT KS Drilling Indonesia. Overall gross profit margin fell from 22.2% to 18.6%. 

Update on operations and bonds. The Titan 2 liftboat is still idle (has been off hire since Dec 2011), but we expect earnings contribution from the Java Star (300ft jackup rig) from Jan 2013. This is a joint operation with Pertamina Drilling under a 1+1 year contract worth US$87.6m.

With regards to KSE’s S$100m convertible bonds that may be redeemed in Mar next year, management is still currently “working on various options to meet this funding requirement” should the redemption option be exercised. It would be helpful if a strategic investor provides some financial support at this juncture.

Realigning operations in drilling subsidiary. The drilling segment will increase its focus on the SE Asian market, in particular Indonesia where there are currently seven rigs operating. There are plans to work with Pertamina to step up drilling activities as well. More assets will be deployed over the next twelve months, particularly in Indonesia.