But here's why management is unfazed.
According to OCBC Investment Research, Triyards Holdings (Triyards) reported a 61% YoY drop in revenue to US$65.7m and a 55% decrease in net profit to US$7.5m in 3QFY13, bringing 9MFY13 revenue and net profit to US$198.4m and US$21.1m, respectively.
Results were in line, with 9MFY13 net profit accounting for 72% of our full year estimate. The fall in revenue was mainly due to lower revenue recognized for the Lewek Constellation – construction progress for this vessel had peaked in 2HFY12.
Gross profit margin in 3QFY13 was higher at 19.2% compared to 12.5% in the year ago period, as 1) certain SEU projects which commenced production in the year had higher profit margins, 2) there was additional work on an OSV and offshore fabrication project, and 3) there was undertaking of ship repair work.
Updates on order book and vessel completion. The group’s net order book stood at US$264m as of end May 2013, comprising three SEUs (deliveries in FY14) and the Lewek Constellation.
Out of this net order book figure, Lewek Constellation accounts for less than a third. After the crane installation and multi-lay system installation, we expect this subsea construction vessel to be delivered around mid 2014.
Management upbeat on outlook
Management reiterated that it is receiving healthy enquiries for the construction of SEUs as such units gain traction in the region, and is in the final stagesof negotiation with potential customers. The group has also received enquiries for building customized supply vessels.
Meanwhile, management mentioned that it received favourable feedback from recent roadshows of its 3rd generation SEU (which has drilling capabilities).
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