Turnover down 8% as new projects yet to generate significant revenue
By OH BOON PING
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ROTARY Engineering, which provides engineering, procurement and construction services to the oil and gas sector, has reported an 11 per cent rise in net profit to $10.7 million for the third quarter ended Sept 30, 2009.
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Turnover for the quarter dropped 8 per cent to $108.8 million. Earnings per share were up at 1.9 cents, from 1.7 cents a year earlier.
For the first nine months of this year, it reported a net profit of $28.1 million - an 11 per cent drop year-on-year, while sales went up 9 per cent to $404.9 million.
Q3 revenue was lower as a number of large projects were completed, while the new projects had yet to generate significant revenue. However, the group saw a marginal increase in its gross profit margin from 23.7 per cent in Q308 to 25.4 per cent in Q309 achieved through cost control and productivity gain from projects completed.
In Q3, it also benefited from a $1.29 million fair value gain on financial instruments.
Rotary recently sealed a US$745 million engineering, procurement and construction (EPC) contract from Saudi Aramco Total Refining and Petrochemical Company (SATORP) to build a refinery tank farm in Saudi Arabia. Its order book now stands at $1.36 billion, of which more than 80 per cent are from outside of Singapore, and the projects on order will last till the end of 2012.
Rotary said it will continue to seek business opportunities in Asean including Singapore, Malaysia and Indonesia, and also capitalise on its recent win in Saudi Arabia, where more infrastructure projects are in the pipeline in the oil and gas industry.
Going forward, Rotary will continue to strengthen its presence in Asean, leveraging on its presence in Saudi Arabia to build market share and improving efficiency by keeping a tight rein on costs, operating efficiencies.
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