Reports » Singapore
Singapore stock market and companies daily report (Keppel Corp, AsiaPhos, Boustead) (October 08, 2013)
Keppel’s Order Book Could Increase By US$1.3b
Analysts note that Keppel Corporation’s latest foray into Mexico could add US$1.32 billion to its order book. Last Friday, its unit Keppel Offshore & Marine (O&M) signed a Memorandum of Understanding with two subsidiaries of Mexico’s national oil company Pemex to set up a new yard in Mexico. Under the US$150 million first phase of the agreement, Keppel O&M will support the building of six KFELS B-class jackup drilling rigs for PEP, a Pemex subsidiary. Although there are not sufficient details on the joint-venture split, order value and delivery dates for the six rigs, OSK-DMG noted that Keppel could earn as much as US$1.32 billion based on current pricing estimates and assuming a unit price of US$220 million. Barclays also offered an estimate of the worth of the projects within the same range, around US$1.2 billion to US$1.3 billion. These projects will likely contribute to the group with staggered-revenue recognition over the next few years.
Significance: Keppel’s move into Mexico is likely to yield longer-term benefits, as it is now well-positioned, through the yard, to capture the growing demand for rigs in the country, especially in the long-term for repair and upgrade works in the region.
AsiaPhos Makes Strong Debut; Closes 58% Above IPO Price
Phosphate miner AsiaPhos’ shares closed 58 percent above its offer price of $0.25 in its trading debut yesterday, making it the best performing initial public offering so far this year in percentage terms. Its shares hit an intra-day high of $0.485 and ended the day at $0.395. AsiaPhos owns exploration and mining rights to two phosphate mines in Sichuan, China, with a total permit area of 5.5 square kilometres. As at 31 December 2012, it had 22.2 million tonnes of measured and indicated resources, and 18.8 million tonnes of inferred resources. Notably, its initial public offering had been about 3.8 times subscribed, with veteran commodities investor Jim Rogers and French financial services firm, Credit Industriel Et Commercial, allotted 5 percent or more of the invitation shares.
Significance: AsiaPhos intends to use $11.5 million of its net proceeds of $21.6 million raised to fund part of its rebuilding programme in Sichuan, which had been disrupted by the 2008 earthquake. Another $8.5 million will be used to develop and expand its mining operations, and the remaining $1.6 million for working capital.
Global Contracts From Oil And Gas Industries Secured By Boustead
Boustead Singapore announced that its Energy-Related Engineering Division (ERED) has recently secured contracts of approximately $38 million from the oil and gas industries globally. These contracts involve work ranging from design, process engineering to process heater system installation services for upstream and downstream oil and gas developments, primarily in Norway and Russia. Executive director of Boustead, Wong Yu Loon, expressed that the ERED has excelled in securing new contracts in FY14, with over $140 million in energy orders so far, significantly surpassing the value of energy orders secured for the whole of FY13. Wong added that the outlook for ERED remains bright as Boustead actively pursues enquiries globally to provide its specialist expertise in process heater systems, waste heat recovery units and process control systems.
Significance: The group, with the addition of the latest contracts, has secured over $300 million in new contracts in FY14, which has also surpassed the orders secured by the group for the whole of FY13. Currently, its order book back log is also raised to $523 million, which could possibly translate to a better looking financial statement when the contracts start getting realised.
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