Swiber achieves US$8.1mln profit on US$84.5mln revenue

Posts 21.2% gross margin, 9.6% net profit margin and US$839mln order book.

Swiber Holdings Limited, a world class integrated construction and support services provider to the offshore oil and gas industry, today reported that it has achieved a net profit of US$8.1 million in 1QFY2010 on the back of a revenue of US$84.5 million.

Revenue was relatively stable at US$84.5 million in 1QFY2010 as compared to US$87.1 million in 1QFY2009 as the Group recognised contributions arising from the maiden Myanmar offshore installation project secured in November 2009. In comparison, 1QFY2009 revenue was mainly contributed by offshore project carried out in India, according to a Swiber report.

Gross margin also remained relatively stable at 21.2% as compared to 20.2% in 1QFY2009 as projects in 1QFY2010 were mainly transportation and installation services in nature.

The Group’s 32.2% decline in net profit in 1QFY2010 to US$8.1 million from US$11.9 million in 1QFY2009 was mainly attributable to higher administrative expenses, other operating expenses and finance costs.

Administration expenses increased by 39.3% to US$7.6 million in 1QFY2010 from US$5.4 million in 1QFY2009 mainly due to an increase in headcount and higher office and administrative expenses to support the Group’s business expansion.

Other operating expenses increased 205.9% to US$3.8 million from US$1.2 million mainly due to a net foreign exchange loss of US$2.4 million. Finance costs was up 39.1% to US$4.8 million in 1QFY2010 from US$3.4 million in 1QFY2009 as a result of the issuance of the US$100.0 million Convertible Bond in 4QFY2009. Group’s bottom line was, on the other hand, boosted by share of profit of associates and joint ventures which increased significantly by 61.9% to US$1.7 million in 1QFY2010 from US$1.0 million in 1QFY2009 due mainly to the inclusion of first quarter results of operation from Victorious LLC, a joint venture company incorporated in March 2009.

Overall, net profit margin declined by 4.1 percentage points to 9.6% in 1QFY2010, as compared to 13.7% in 1QFY2009.

The Group maintained a strong balance sheet with a healthy cash position of US$82.7 million and reduced gearing. Net debt to equity stood at 0.81 times as at March 31, 2010 as compared to 0.84 times as at December 31, 2009.

Swiber’s basic earnings per share, based on its 1QFY2010 results, was 1.60 US cents from 2.30 US cents in 1QFY2009, the decrease in EPS was mainly due to new shares issued in 2QFY2009, while net asset value per share rose to 59.6 US cents as at March 31, 2010, from 58.9 US cents in the same corresponding period.

With global economic recovery and stabilisation of oil prices in recent quarters, Swiber believes that the offshore oil and gas activities in the Asia Pacific and the Middle East will remain positive in the near term.