Kreuz's earnings rocket 49% to US$39.7m

Here are 2 growth drivers.

According to UOB Kay Hian, Kreuz reported 2012 net profit of US$39.7m, up 49.0% yoy, and in line with forecast of US$39.0m. 

Growth was driven by: a) higher revenue of US$193.4m, up 25.8% yoy, due to more related-party contracts, and b) higher gross margin of 32.9%, 2.2ppt higher than
the 30.7% in 2011.

This was due to the acquisition of the Kreuz Installer in 1H12 which reduced the group’s dependence on higher-cost third-party vessel charters.

Here's more from UOB Kay Hian:

Across-the-board margin improvement. EBITDA margin improved from 27.0% in 2011 to 29.6% in 2012, while net margin rose from 17.3% in 2011 to 20.5%, largely due to the improvement in gross margin.

Stable trade receivables. In 2Q-4Q12, trade receivables have remained constant at about US$150m. We believe that on a qoq basis, ageing of trade receivables had improved marginally.

Improved gearing. Net gearing declined from 19.5% in 2011 to 8.0% in 2012 due to a larger ending cash balance and a higher equity base.