Boustead Singapore

Though it's been more than a month since this article was published, it was only recently posted up on Boustead's website. It's an article from The Edge on Boustead's misadventure in Libya.

http://www.boustead.sg/News%20Coverage/2...gapore.pdf

Boustead should be releasing its FY 2011 results in late-May 2011. Even if they do make a large write-off on their Libyan venture, I would still expect an unchanged final dividend of 2.5 cents/share as cash flows are not expected to be affected.

Hi, MW, since we got 2.0 cents/share for interim dividend, I'm quietly hoping that the final dividend would also be raised to 3.0 cents/share. We can probably forget about any special dividend due to Libya problem.

(06-05-2011, 01:43 PM)egghead Wrote: Hi, MW, since we got 2.0 cents/share for interim dividend, I'm quietly hoping that the final dividend would also be raised to 3.0 cents/share. We can probably forget about any special dividend due to Libya problem.

Haha, well with the problems in Libya my personal view is I will be happy if they can just maintain the final dividend at 2.5c/share as per last year. When they declared the interim dividend, the Libyan troubles had not yet begun.

I recall there was a special 1.5c dividend for FY 2010, making the total dividend 4c/share for FY 2010. Let's see how it goes.

Note that Boustead will be releasing its FY 2011 results on May 26, 2011 (Thursday) after market close. There will, as per prior years, be a LIVE audiocast in which participants who signed up can pose questions to Management (KK Loh and FF Wong) on the business and results.

Please register for the FY 2011 audiocast here:-

http://mediacast.4by3.com.sg/boustead/

As per previous years too, Boustead will post up the audiocast as an mp3 file for all to listen in, in case you miss it.

(Vested)

Boustead reported record revenue of $560.6 million and gross profit of $178 million for FY 2011. Gross margin was a high 31.8%.

Net profit attributable to shareholders, however, was impacted by the Libya write-offs and provisions, which caused a 4Q 2011 net loss of $1 million. FY 2011 net profit was $52.2 million, still 21% up from FY 2010 despite the write-offs.

Cash Flow remained strong and the Company has declared a 2c/share final dividend and (surprise) 3c/share special dividend! This brings total dividends for FY 2011 to 7c/share (interim was 2c/share). I am very pleased with the bumper payout but am concerned over potential growth prospects and lingering economic worries. Will query the Management on these concerns.

Will analyze the numbers and write more on Boustead in the weeks to come, on my blog.

Cheers!

Anyone joined the live audiocast? Any comments?
I missed it and the copy is currently not available.

MW, could you spot where it stated that they booked the Libya write-offs? I cant seem to find it.

It is found under the other operating expenses line in the income statement? Or is it the amount found in Note 2, where the loss would be the items net loss in restructuring of jv, loss of disposal of subsidaries and allowance of doubtful receivables.

In summary, I think it is important for Boustead to secure more real-estate contracts where margins and amount are significant among other business lines.

(26-05-2011, 10:05 PM)mrEngineer Wrote: MW, could you spot where it stated that they booked the Libya write-offs? I cant seem to find it.

It is found under the other operating expenses line in the income statement? Or is it the amount found in Note 2, where the loss would be the items net loss in restructuring of jv, loss of disposal of subsidaries and allowance of doubtful receivables.

In summary, I think it is important for Boustead to secure more real-estate contracts where margins and amount are significant among other business lines.

Hi Mr. Engineer,

Yes, the items can be found in Note 2 on Page 5 of the Financial Statements. There is an allowance for doubtful receivables of $11.4 million, as well as a provision for cash at risk of $2.444 million. This totals up to about $13.8 million, and I believe this is what wiped out all the profits for Boustead for 4Q FY 2011. I had already braced myself for this Libyan impact in 4Q 2011, so was not too surprised.

As for the restructuring of JV, I believe that it was done during 3Q 2011, and so this expense was not recognized in 4Q 2011. Nonetheless, it still constitutes an expense when you look at FY 2011 results, and is $1.128 million. Hence, total Libyan "damage" came up to about $15 million. Let's hope Boustead learns a valuable lesson from this fiasco!

Boustead needs to think about their Salcon and how it can continue to contribute to the bottom line. Right now, it's dragging the entire Group's results down! As for Real-Estate Solutions Division, they need to build up their Design, Build and Lease portfolio to be able to secure more recurring income. As of March 31, 2011, their industrial leasehold property portfolio stands at 84,002 sqm, compared with 77,952 sqm as at March 31, 2010. With the recent clinching of even more contracts, I am sure this figure can only go up.

Will be reading more and analyzing and posting my thoughts here.

Business Times - 27 May 2011

Boustead's Q4 hit by Libyan provisions

But generous payout proposed as full-year net profit rises 21%

By VEN SREENIVASAN

DESPITE losses on its Libyan projects which sent it into the red for its fourth quarter, mainboard engineering company Boustead Singapore proposed a generous final payout of five cents per share after posting strong full-year earnings.

After provisions for its two Libyan projects following recent turmoil in that country, which resulted in 'other operating expenses' rising $19 million to hit $22.1 million, Boustead posted a loss of $1 million for the January-March 2011 final quarter. But revenue for the quarter was up 8 per cent to $110.1 million.

For the year ended March 31, the company lifted its revenue 28 per cent to a record $560.6 million, while net profit rose 21 per cent to $52.2 million - its second highest ever.

The cash-rich company declared a total dividend of five cents a share, comprising a final dividend of two cents per share and a special dividend of three cents per share. It paid out two cents a share in mid-year.

At the operating level, Boustead's gross profit surged 34 per cent to $178.1 million, widening its gross profit margin to 32 per cent from 30 per cent a year earlier.

Part of this came from the $67.8 million sale of IBM Singapore Technology Park.

Cash and bank balances decreased slightly to $209.8 million, but Boustead's net cash position was $184.6 million as at the end of FY2011, or a net cash per share position of 36.5 cents.

New businesses in all its core divisions did well during the last five months, with 20 contracts worth $158 million secured since January. Boustead's current order book stands at $230 million, and growing.

In terms of its four main business units, its energy- related engineering revenue rose 15 per cent to $140.9 million, thanks to the strong performance of downstream oil & gas business.

Water & wastewater engineering revenue declined 48 per cent to $28.7 million due to slower recognition from major projects compared to the previous financial year.

Real estate solutions revenue rose 61 per cent to $295.7 million. This included the $67.8 million sale of IBM Singapore Technology Park and substantial completion of two major projects for Rolls-Royce at Seletar Aerospace Park.

Geo-spatial technology revenue rose 27 per cent to $94.7 million (a new division revenue record), and included the maiden full- year contribution of acquired subsidiary MapData Services. The unit also benefited from strong sales of software and services to government agencies across exclusive markets in Australia and South-east Asia.

(Vested)

I'm just happy with the $0.05 dividend