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Headliners (XMH Hldgs, Falmac, Fastube, Keppel)
Headliners | 25 March 2011
Related stocks:
BN4
By: Gerald Teo
Articles (40) Profile

Broad-Based Growth Underpins XMH’s Strong Performance In 9M11
Diesel engine distributor XMH Hldgs’ (XMH) 9M11 revenue increased 12.9% y-o-y to $53.4m supported by broad-based growth. Its operating profit in 9M11 would have been higher at $12.2m if the one-off IPO expenses of $1.4m were excluded. Coupled with lean cost management, XMH managed to post a 4.5% y-o-y rise in operating profits. XMH also expects minimal disruption to business despite likely delays from its vendors Mitsubishi Heavy Industries (MHI) and MHI Engine System Asia, which account for 78% of XMH’s purchases in FY10, in the wake of Japan’s earthquake. Its orderbook stands at $64.8m as at 17 Mar-11. Meanwhile, its new dealership right with Akasaka allows XMH to tap on the new market. XMH is positive on the future outlook with emerging markets such as China, Vietnam, India and Brazil bringing a wave of opportunities from the marine sector, intensifying demand and spurring growth for diesel engines and services.

Falmac’s Auditors Fail To Obtain Appropriate Audit Evidence For Second Year
Auditors, again, failed to gain access to Falmac’s essential accounting records for the financial statement ended 31 Dec-10. One key problem was an uncooperative legal representative of the firm’s Chinese subsidiaries, who has denied the board of directors access to the factory premises and financial records. This is the second year that auditors LTC LLP issued a disclaimer on Falmac’s financial statements, citing similar reasons. Falmac has not been in operation for the past 2 years and is now in the midst of selling its loss-making business and injecting gold-mining assets through a reverse takeover (RTO) of CNMC Goldmine. Falmac has a capital deficiency of $4.1m as at 31 Dec-10. Coupled with the inability to gain access to essential accounting records of its Chinese subsidiaries, it is hard to find sufficient evidence to ascertain that the firm can continue as a ongoing concern.

Fastube Proposes $146m RTO Deal
Fastube, a Chinese steel piping solutions specialist, announced plans for a $146m RTO deal, which will see the offshore player list on the Singapore Exchange. Under the terms, controlling shareholders of Fastube, namely Gong Yucai, Xia Jing and Gong Haitao, will acquire the entire shareholdings of Atlantic Navigation Holdings from Wong Siew Cheong and Chong Mee Chin. The proposed acquisition will be satisfied entirely by the issuance of 228.1m new shares at a price of 64 cents apiece after a proposed 10-into-1 share consolidation. The targeted completion date is 31 Aug-11. Fastube has been in the red for 2 years and remains in a net debt position. The deal is leaning towards the upside given that Atlantic runs a profitable offshore chartering business in the oil and gas industry, and may create greater liquidity for the otherwise illiquid counter.

Keppel Wins US$210m Jackup Contract
Keppel FELS has secured a contract worth about US$210m from Japan Drilling Co (JDC) to build a KFELS Super B Class jackup rig, that is slated for delivery in 1Q13. This rig will be JDC’s first newbuild rig order in six years and Keppel FEL’s first for JDC. The KFELS Super B Class design is one of the world’s deepest drilling rigs with drilling depth of 35,000 ft and its leg structure is uniquely designed to provide enhanced robustness for operations at a 425 ft water depth. The addition ties in with JDC’s plan to expand its operations globally and strengthen its offshore fleet. It will also be an important addition to boost JDC’s capabilities and offerings to customers. To date, 33 KFELS B Class and Super B Class rigs have been delivered for operations in various parts of the world. This 12th rig order will bring Keppel O&M’s total contracts value to $4.5b in 1Q11.

Keppel Corp  5.840 -0.12 -2.01%   
Business: [FY18 Turnover] Infrastructure (44.1%), offshore & marine (O&M) (31.4%), property (22.5%), investments (2%).

Insight: Apr-19, 1Q19 revenue rose 4.1% underpinned by high... Read More


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