Rotary Engineering posts 42% slide in Q3 net profit

Mr Roger Chia, Chairman and Managing Director of Rotary Engineering Limited.
Mr Roger Chia, Chairman and Managing Director of Rotary Engineering Limited. PHOTO: ROTARY ENGINEERING

SINGAPORE - Oil and gas infrastructure service firm Rotary Engineering on Wednesday (Nov 4) posted a 42 per cent slide in its third-quarter net profit to S$6.3 million, down from the same period a year ago.

Revenue for the three months to Sept 30 slumped 65 per cent to S$60.3 milion, as the company reached completion on some of its major projects.

Gross profit margin, however, was up 22 per cent, compared with the 17 per cent previously, thanks in part to its "productivity improvement effort and project closures", said the group in a filing to the Singapore Exchange.

Earnings per share for the quarter came in at 1.1 cents, down from the 1.9 cents previously. Net asset value per share stood at 46.4 cents as at Sept 30, up on the 45.2 cents as at Dec 31 last year.

No dividend was declared for the period.

For the nine months to Sept 30, net profit fell 55 per cent to S$17.1 million, while revenue dropped 61 per cent to S$217.1 million.

Rotary Engineering said that while the slump in oil prices has led to a cut in the capital expenditure of oil companies on exploration and production activities, the demand for liquid bulk storage - which is based on the transportation, storage and distribution process - has been "relatively less affected".

"Major shifts in the global trade flows of petroleum and petrochemical products, economic growth as well as urbanisation favours the development of more storage hubs in Asean and the Middle East."

The group, whose orderbook stands at $144 million, also said that it is "on the lookout for strategic investment opportunities that will add to its spectrum of services along the value chain, to provide stable and sustainable income streams".

"With our strong balance sheet, Rotary is in a good position to take advantage of strategic opportunities that can further grow the group's business," said Mr Roger Chia, the firm's chairman and managing director.

Rotary Engineering closed 1 cent or 2.6 per cent down at 38 cents on Wednesday.

tsjwoo@sph.com.sg