ASL Marine Holdings’ $31.9m profit within expectations

But the shipping company's revenue declined 22% to S$363.2 million.

According to DBS, recent order wins of S$28m builds on order momentum and the company’s $310m orderbook translates to healthy 1.7x book-to-bill.

Here’s more from DBS:

Comment on Results
FY11 in line. FY11 recurring net profit of S$31.9m (-14% y-o-y) was within expectations. Revenue declined 22% to S$363.2m due to 1) lower shipbuilding orderbook; 2) fewer large conversion jobs; and 3) weaker demand for towing jobs. Gross margin was relatively stable at 13.7% (+0.7ppt).

Net gearing inched up to 0.61x vs. 0.37x a year ago and may edge higher towards 0.68x by end FY12 as 20/80 payment terms to customers become increasingly common. A final DPS of 1.5Scts was declared, translating into a full year payout ratio of 20% or a yield of 2.9%.

Recommendation
Snapping the declining orderbook trend. ASL booked S$193m of new shipbuilding orders in FY11 (vs. FY10’s estimated S$110m), and recently added orders for 2 vessels worth S$28m, bringing its current orderbook to S $310m (for delivery into 2013). With c. 58% to be booked in FY12, this translates into a relatively healthy book-to-bill of 1.7x.

While we are encouraged by the reversal of the declining orderbook trend, we are not overly excited as these orders were likely to have been priced at relatively low margins, given the intense competition in the market. Our FY12/13F order wins assumption remains at S$150m/S$200m.

Maintain HOLD; S$0.59 TP. We trim our FY12/13F earnings by around 5% each as we adjust the recognition schedule for ASL’s shipbuilding orderbook. In line with this, our TP is lowered to S$0.59 (from S$0.63), still pegged to 8.2x FY12 PE.

While valuation is undemanding, we look forward to stronger order flows and sustained margin recovery before turning more positive on the counter. Maintain HOLD.

Also Read

Yangzijiang Financial to seek approval for maritime diversification at EGM

S’pore Polytechnic and Vopak collaborate to boost safe marine fuel handling

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit