Nordic Group To Raise $22m From IPO
Nordic Group, a solutions provider for the marine and offshore sector, is expecting to raise $22m from its initial public offering (IPO). The group is offering 110m new shares at 20 cents each. 2m of the shares are available for public subscription and the remaining shares will be offered by way of placement. Of the net proceeds of about $20m, $6m will go towards ramping up its production capacity, sales network and operations in China. A sum of $1m will be spent on expanding its MRO and trading division, while $6m will be held as working capital. The group also plans to issue dividends of up to 30% of profits attributable for FY10 to shareholders. The IPO will close on 8 Nov at noon. Trading of the shares is expected to start on 10 Nov.

Significance: Riding on the appetite for drilling in Asia Pacific, Nordic is poised to benefit from the positive prospect for the offshore and marine support sector.

SMRT’s Q2 Earnings Fell 13.3% To $45.8m
SMRT posted a 7.2% jump in its 2Q10 revenue, thanks to strong growth in train and bus ridership and higher rental and advertising revenue as well as the contribution from Circle Line Stages 1 and 2. But this was partly offset by lower revenue from the Palm Jumeirah Monorail project in Dubai. On the other hand, higher operating expenses and lower average fares caused SMRT Corp’s earnings to fall 13.3% to $45.8m. The opening of the Circle Line also ate into SMRT’s bottom line as the average daily ridership of 154K still below the projected ridership of 200K. ‘Though Circle Line ridership has increased, the losses of Circle Line continue to impact the group results,’ said SMRT president and CEO Saw Phaik Hwa. An interim ordinary dividend of 1.75 cents per share has been declared.

Significance: Wary remains on losses from the shortfall in ridership. Furthermore, margin pressure from rising fuel and electricity costs are also expected to affect SMRT’s profitability.

UOB’s Q3 Earnings Jump 37.5%
United Overseas Bank (UOB)’s 3Q10 earnings rose 37.5% to $688m, as bad-loan charges fell with improved economic conditions in its main markets. Higher fee and commission income, and bigger-than-expected trading and investment gains also helped to offset a widely expected fall in its net interest income from lending, its main revenue stream. The bank also signalled continued optimism in its outlook. “The global dilemma remains, gradual but volatile recovery in the West and asset-price inflation in the East,” said chief executive Wee Ee Cheong. For the first nine months of the year, UOB’s net profit came to $1.99b, up 44.2% from a year ago.

Significance: Despite the bigger-than-expected rebound in trading income, analyst cites a not so great outlook on the interest income due to persistently low interest rates and renewed competition that put severe pressure on the lending margins of banks.

KS Energy Buys 60%-Stake In Indonesian Drilling Company For US$5.25m
Oil and gas services provider KS Energy (KSE) has just acquired a majority 60% stake in an Indonesian drilling contractor which has a US$66.6m, 5-year contract with an international oilmajor to provide and operate 2 land rigs in Indonesia’s Papua region, for a value of US$5.25m ($6.8m). KSE is targeting that in 2 years’ time, its drilling contract deals in South-east Asia can account for as much as 50% of its drilling revenues, up from zero right now. ‘We are looking at land rig contracts in areas like Sumatra and East Java, while for shallow water rigs, we are looking at East Indonesia,’ Kris Wiluan, KSE chairman and CEO said.

Significance: The acquisition is viewed as an opportune time for KSE to enter Indonesia as the country is starting to ramp up its deteriorating oil production. Meanwhile, KSE will be well positioned to tender for more projects in Indonesia’s Oil & Gas industry.