PEC 2010 full-year profit up 96% to S$48.2mln

Jurong Island developments and growth prospects in Asia, Europe and the Middle East, presented opportunities.

PEC Ltd. (“PEC”, and together with its subsidiaries, associated companies and joint venture companies, the “Group”), on Thursday announced results for the full year ended 30 June 2010 (“FY2010”) and for the financial quarter ended 30 June 2010 (“Q4 2010”), according to a PEC report.

The Group’s net profit after tax in FY2010 increased by 96% to S$48.2 million from S$24.5 million in
FY2009. The rise in net profit was on the back of a 35% increase in gross profit from $91.4 million to S$123.2 million, as well as an increase in gross profit margin to 26% in FY2010 from 21% in FY2009.

Revenue in FY2010 grew 6% to S$467.4 million from S$440.5 million in the previous year mainly due to increased contributions from project works in Singapore and Malaysia as well as maintenance services in China that were partially offset by the decrease in project revenue in the Middle East. On a segmental basis, revenue from project works comprised about 73% of Group revenue in FY2010, with revenue from maintenance services and other operations making up the balance. Geographically, Singapore continued to be the Group’s largest market, contributing about 83% of Group revenue in FY2010. The Group posted earnings per share of 17.9 cents in FY2010, up from 12.0 cents in FY2009.

The Board recommended a total dividend of 4.0 cents per share comprising a final dividend of 2.0 cents plus a special dividend of 2.0 cents per share.

PEC’s balance sheet remained solid with cash and cash equivalents for the Group reaching S$160.8 million as at 30 June 2010. Net asset value per share for the Group was 70.9 cents at 30 June 2010 compared to 60.0 cents in 30 June 2009.

Commenting on PEC’s FY 2010 performance, Mr Robert Dompeling, Group Chief Executive Officer said,
“PEC achieved growth in both our topline and bottomline in FY2010 despite the challenging economic and operating environment during the financial year. While Singapore continued to be a key market for us in FY2010, our focus on overseas expansion has also paid off with new projects from Malaysia and China during the year and our first major contract win in Europe. PEC was the first company to be listed on the mainboard of the SGX-ST following the global financial crisis and I am pleased that we have achieved a credible set of results in our first full year after listing. We note that our shareholders have been supportive and would like to show our appreciation by recommending a special dividend in addition to our final dividend.”

As at 30 June 2010, the Group's order book for on-going and new project works was approximately S$260 million. This excludes any revenue from the Rotterdam project secured by PEC’s 50/50 joint venture, which has a value of approximately EURO 118 million.

The Group’s long-term prospects remain promising but the operating environment for FY2011 will be challenging with increased competition and a gradual but steady increase in costs of material and labour.
Looking ahead, PEC will continue to focus on further enhancing productivity and leveraging synergies, while concurrently pursuing overseas business opportunities and enhancing the Group’s core and related services to mitigate the rising pressure on overall margins.

Mr Dompeling commented, “The Group will continue to actively pursue overseas business opportunities, particularly in Asia, Europe and the Middle East, where PEC already has strong entry points which we can capitalise on. Through our joint venture in the Middle East, we are looking to pursue more opportunities in Saudi Arabia and Kuwait. We will also looking for further opportunities in the Europe, leveraging on our strong entry in The Netherlands.”

Mr Dompeling also noted that the Singapore government’s push to upgrade Jurong Island is expected to generate significant opportunities for the Group, especially given PEC’s track record in project works and maintenance services on Jurong Island. In addition, the new plants on Jurong Island will present opportunities both now and in the future.

“With our strong fundamentals and established track record, as well as clear and focused expansion strategies, we are well-positioned to leverage on the long-term growth of the industries we operate in.” Mr Dompeling concluded.