Ausgroup

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#1
Ausgroup falls after CEO resigns

SINGAPORE, May 31 (Reuters) - Shares of Singapore-listed Ausgroup fell as much as 5 percent on Tuesday to a near one-month low after it said its chief executive officer had resigned.

At 0235 GMT, shares of Ausgroup were traded at S$0.40 with over 3 million shares changing hands.

Ausgroup's CEO John Sheridan will be replaced by Stuart Kenny as the acting CEO with effect from May 31 while the company looks for a new chief executive.

"The resignation was unexpected, and its share price is reacting to the uncertainty in what the group's direction will be now," said CIMB analyst Yeo Zhi Bin.

Source: Reuters

(Not Vested)
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#2
Business Times - 01 Jun 2011

HOT STOCKS
AusGroup share price falls 7% as CEO quits


Sudden resignation follows board's annual performance review: acting CEO

By VICTORIA HO

AUSGROUP'S CEO John Sheridan has resigned with immediate effect, sparking a 7 per cent drop in the company's stock price yesterday.

Stuart Kenny, who stepped in as acting CEO, told BT yesterday that the sudden resignation came after an annual review with the board.

Mr Kenny would not specify the reasons for Mr Sheridan's departure, except to say that the resignation followed 'certain robust discussions about company performance'.

The acting CEO is no stranger to AusGroup. He was AusGroup's CEO and managing director for four years before stepping down in January 2008 and taking a non-executive director role.

He is filling the CEO role while the oil and gas contractor looks for a new CEO, a role which Mr Sheridan held for three years.

Mr Kenny said that there was dissatisfaction within the board over the company's bottom line performance. He added that the new candidate will focus on improving that.

During a presentation to investors in February, Mr Sheridan said that the company's net margins had been under pressure because of a lack of contracts secured during the global financial crisis, as well as from competition in the mineral resources industry.

He said that the company expected margins to improve with a healthier order book in the second half of the year.

Mr Kenny said: 'John has left the company in good shape. There is no change in strategy or focus. He has left a legacy of strong systems processes.'

The company has started its search process, but has not narrowed down any candidates because of how sudden Mr Sheridan's departure was, said Mr Kenny.

Mr Kenny added that since he stepped down as CEO in 2008, the company has grown in the direction that he envisioned.

Commenting on AusGroup's share price fall from 42 cents to 39 cents yesterday, CIMB analyst Yeo Zhi Bin said: 'The resignation was unexpected, and its share price is reacting to the uncertainty in what the group's direction will be now.'

AusGroup chairman Chew Kia Ngee said: 'With so much of our activity focused in the exceptionally strong resources sector in Western Australia where high commodity prices are fuelling investment in a number of large projects, we look forward to further growth opportunities for the group.' He added that 'Mr Sheridan had been a very committed CEO'.

The company's order book currently stands at A$288 million (S$378.7 million), following the award of a A$60 million contract by Karara Mining at its iron ore mine.

Last week, AusGroup also secured a A$50 million contract in Western Australia.

Mr Sheridan could not be reached for comment yesterday.

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#3
The Straits Times
May 21, 2012
TALKING TO... AUSGROUP
Mining for profit Down Under

Services provider goes back to basics to ensure contracts boost bottom line

By Yasmine Yahya

BIG contracts are meat and drink to Australian services firm Ausgroup but that has not stopped the new man at the helm from putting the company through a refresher course in Project Management 101.

Chief executive Laurie Barlow, who took over the role two months ago, says his most important job now is to ensure that the company's bottom line reflects the big-scale projects it is involved in.

This will not be anything new to him. Before being hired by Ausgroup for the top job, he was managing director of mining at Aecom, a Fortune 500 company that provides project management services.

For several years, Ausgroup, which provides manufacturing, construction and asset maintenance services, had been consistently winning massive contracts with major energy and mining firms, yet its bottom line did not budge.

Mr Barlow says that, too often, projects ended up bleeding money near completion as spending got out of hand.

Employees also tended to resign when the project they were working on came to an end, incurring costs for the company, which had to hire new staff and train them.

But over the past year, Mr Barlow says, Ausgroup has been working to put a stop to these problems, with tangible results.

Early this month, it reported third-quarter net profit had more than doubled from a year ago to A$6.8 million (S$8.8 million) while revenue rose 18 per cent and operating expenses rose by 47 per cent.

Its gross margin improved to 11.2per cent in the three months to March 31, from 8.4 per cent in the same period last year.

These numbers also show the hard work over the last year that Ausgroup has put in to bolster its finances. 'There's been a lot more emphasis on the commercial management of projects - taking care of things such as cash flows and invoicing,' Mr Barlow adds, noting that there has also been more focus on employee retention.

'People leave projects early if they don't see continuity...so now, towards the end of the project, we'll tell our staff about the next project they'll move on to. For example, we have two projects coming up so we're telling them they can move on to those.'

When staff stay on to the completion of a project, they also help to tie up all the loose ends, which saves money and thus contributes towards profits, he says. 'My focus is now delivering the results of those projects to the marketplace, so that the market can see we can deliver profit to the bottom line.'

The boom in the liquefied natural gas (LNG) sector is certainly helping. Exploration and production works in the oil and gas industry, and especially in the LNG sector, are major contributors to Ausgroup's revenue at the moment.

The firm's order book today stands at A$443 million. It was awarded an extension contract this month to provide scaffolding services and equipment to the Pluto LNG plant in Western Australia, operated by Australian energy firm Woodside in a joint venture with Tokyo Gas and Kansai Electric.

Up to that point, Ausgroup had already completed over one million man hours on the project.

The company will also be involved in several other LNG projects over the next few quarters, including some operated by energy giants Chevron and Inpex.

At the same time, Ausgroup is looking to increase its business in the mining sector, Mr Barlow says.

Its unit, AGC Industries, already does work for the big names in iron ore mining, such as BHP Billiton and Fortescue Metals Group. Now it plans to offer more services from Ausgroup's other divisions.

'Within Australia, AGC Industries is recognised as a leader in structural mechanical piping. We'd like to bring in our scaffolding and maintenance services, give our clients a more holistic offering.'

For the time being, the company will continue to focus on expanding within Australia, says Mr Barlow.

'Our plan is to maximise business in Australia. Once we can establish good project delivery, maximise our take in the Australian market and prove to our investors that we can deliver on our promises, then we will look outside Australia, with a focus on oil and gas.'

Despite uncertainty ahead for the global economy, Mr Barlow says he is confident Ausgroup's business will continue to power on.

'There is about US$300 billion in mining and LNG projects around the world today. A lot of these projects, by companies like BHP, Rio Tinto, Gladstone and Inpex, have already got their funds approved,' he said.

Ausgroup's shares closed at 32.5 cents on Friday.

yasminey@sph.com.sg
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#4
This one looks good on first glance.

Here is a brief summary of its 1Q 13 results announced on 8 Nov 12.
• AGC is one of Australia’s leading manufacturing / fabrication, construction and integrated services companies, servicing the oil and gas and mineral resource industries. In 2005, AusGroup Ltd acquired Cactus Engineering and Trading Pte Ltd, a specialist engineering company focusing on upstream oil and gas and the manufacturing of subsea and marine equipment.
• 1Q 13 revenue increased by 25.9%, gross profit increased by 41.9% and PBT increased by 111.4%.
• Cash holding is A$45.2m, up from A$32.8m last quarter. Borrowing is A$5.6m, down from A$6.1m last quarter.
• Net cash flow from operating activities is A$16.4m, up from A$5.5m in 1Q 12. Purchase of PPE incurred A$1.8m. Cash per share is 10.6 Singapore cents.
• Number of issued shares is 480,306,136.
• EPS is AU cents 1.3. PER based on share price of $0.52 is 9.2. NAV is AU cents 35.2 and price/NAV is 1.1. Dividend was 1 cent and yield is 1.9%.
• The Group has work in hand to the value of AU$303 million as of 8 November 2012.
• The Group expects, from time to time, delays in the finalising of variations around certain types of construction projects under our contractual entitlements. This will create a degree of variability in the Group results from quarter to quarter. The Group’s accounting policy is to recognise costs as they are incurred, which may not match revenue from variations, as these have to be negotiated and agreed with clients.

From an announcement released on 24 September 12:
• The Company is considering a demerger of its subsidiaries into a group headed by its key subsidiary, AGC Australia Pty Ltd (“AGC”), and then seeking a listing of AGC on the ASX via reverse takeover. It is intended that the Company’s shareholders will receive shares in AGC and still retain their shares in the Company, although their shareholdings in the Company will be heavily diluted following the completion of the reverse takeover.
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#5
Only caveat for Aussie mining services providers - rising labour costs and intensifying competition from other local competitors as a result of shrinking order books due to the slowing resources sector down under.

Its difficult to understand the dynamics of mining services from Singapore given the stellar performance of Civimec and Aus Gp.

Unless you have high risks appetitie and done comprehensive research, it wise to weigh your options.

(17-12-2012, 08:12 PM)shn Wrote: This one looks good on first glance.

Here is a brief summary of its 1Q 13 results announced on 8 Nov 12.
• AGC is one of Australia’s leading manufacturing / fabrication, construction and integrated services companies, servicing the oil and gas and mineral resource industries. In 2005, AusGroup Ltd acquired Cactus Engineering and Trading Pte Ltd, a specialist engineering company focusing on upstream oil and gas and the manufacturing of subsea and marine equipment.
• 1Q 13 revenue increased by 25.9%, gross profit increased by 41.9% and PBT increased by 111.4%.
• Cash holding is A$45.2m, up from A$32.8m last quarter. Borrowing is A$5.6m, down from A$6.1m last quarter.
• Net cash flow from operating activities is A$16.4m, up from A$5.5m in 1Q 12. Purchase of PPE incurred A$1.8m. Cash per share is 10.6 Singapore cents.
• Number of issued shares is 480,306,136.
• EPS is AU cents 1.3. PER based on share price of $0.52 is 9.2. NAV is AU cents 35.2 and price/NAV is 1.1. Dividend was 1 cent and yield is 1.9%.
• The Group has work in hand to the value of AU$303 million as of 8 November 2012.
• The Group expects, from time to time, delays in the finalising of variations around certain types of construction projects under our contractual entitlements. This will create a degree of variability in the Group results from quarter to quarter. The Group’s accounting policy is to recognise costs as they are incurred, which may not match revenue from variations, as these have to be negotiated and agreed with clients.

From an announcement released on 24 September 12:
• The Company is considering a demerger of its subsidiaries into a group headed by its key subsidiary, AGC Australia Pty Ltd (“AGC”), and then seeking a listing of AGC on the ASX via reverse takeover. It is intended that the Company’s shareholders will receive shares in AGC and still retain their shares in the Company, although their shareholdings in the Company will be heavily diluted following the completion of the reverse takeover.
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#6
Good points. However, invetsment is all about taking calculated risks. At this juncture I am merely comapring various stocks in oil and gas industry. I hold the believe that oil and gass will outperform most other sectors for the next 12 months as the demand is still strong.
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#7
If you wish to learn more about oil & gas, then you should start reading up on the impact of shale on the traditional oil & gas sector.

There is no doubt that everyone is taking calculated risks. Without the rights to explore, the major profitable players listed on SGX are none other than the yards whose rigs are used by most oil & gas exploration companies.

Once upon a time, the off shore support vessels companies such as Ezra, Swiber and Jaya were darlings. While rig builders continued to rack up record contracts, these offshore vessels companies also had good turnover based on locked in contracts.

Unfortunately, many has had bad past few years due to poor margins and worst ran into cashflow problems (Jaya only recent got out of "jail" due to loan covenants imposed by bankers). Even the present darling Ezion is being driven by contract announcements without healthy cashflow generated from contract wins as yet.

There is no doubt that bottoms up approach may uncovered gems in mid to smaller cap companies. The risks associated with these companies will inevitably be higher. More importantly, investor should differentiate between track records of a global player vs that of a passing fashion (aka market darlings that usually will come back down on earth a lot harder).

(17-12-2012, 10:38 PM)shn Wrote: Good points. However, invetsment is all about taking calculated risks. At this juncture I am merely comapring various stocks in oil and gas industry. I hold the believe that oil and gass will outperform most other sectors for the next 12 months as the demand is still strong.
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#8
Companies affected by the cancellation of the project in Western Australia could include Ausgroup, Civimec and possible Ezion...

http://au.news.yahoo.com/thewest/a/-/new...b-project/

$45b Browse gas hub dead
Andrew Probyn, Peter Kerr, Gareth Parker, Peter Klinger, Dan Emerson and AAP, The West Australian
Updated April 12, 2013, 9:50 am
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Woodside chief executive Peter Coleman. Picture: Nic Ellis/The West Australian
Related Links
: FULL COVERAGE
: 'Win for Kimberley'
: Gas hub failure a tragedy: Barnett
Woodside says it is confident the Browse gas project will go ahead, despite the energy giant scrapping plans for the controversial onshore processing plant at James Price Point.

Woodside announced today that it had dumped plans for the controversial $45 billion project.

Chief executive officer Peter Coleman said the decision to dump the plan for James Price Point was tough, saying the project was subject to cost pressures.

"We do believe that Browse will get developed,” he said.

He would not be drawn on the cost estimate of the James Price Point development but said Woodside had tried everything to significantly reduce the budget, including reducing the size of the proposed LNG trains, in an effort to enhance the economics.

In the end the costs had not come down sufficiently for the Browse project to be viable.

Mr Coleman said the feedback from Premier Colin Barnett, who was informed last night, and Federal Resources Minister Gary Gray was supportive.

Mr Coleman said it was too early to discuss specifics around other development options for the Browse gas, and he declined to give his preference.

He said the hype sparked by environmental protesters had not been a factor in Woodside's decison, which was based solely on economic reasons.

In an announcement to the ASX this morning, Woodside said it would review alternative ideas with its joint venture partners.

Woodside said James Price Point "does not meet the company's commercial requirements for a positive investment decision".

It leaves the future of what was going to be one of Australia's biggest-ever resources projects in limbo.

Woodside said a major review of the proposed LNG processing plant, near Broome, had found it would not deliver the returns the company needed.

"Woodside will immediately engage with the Browse joint venture to recommend evaluation of other development concepts to commercialise the Browse resources, which could include floating technologies, a pipeline to existing LNG facilities in the Pilbara or a smaller onshore option at the proposed Browse LNG precinct near James Price Point,” the statement said.

In a media conference in Perth, Mr Coleman said that Woodside had been looking at other options to a processing plant at James Price Point, but that they were nearly as mature as the original plan for the onshore facility.

However some of the alternatives that would be considered did have the potential for the early development of Browse.

"We've already come out and said things like floating technology, for example, is a technology that Woodside supports ... whether that's appropriate for a Browse development will need to be determined by the joint venture over time,” Mr Coleman said.

Shell's Australian boss Ann Pickard reiterated that it believed its floating technology would be the fastest, most economic and best technical solution for processing gas from the Browse project.

"Floating LNG can bring significant long-term, sustainable jobs to Western Australia, Australia, and the Kimberley, as well as providing employment and business opportunities for Kimberley indigenous people,” Ms Pickard said in a statement.

Ms Pickard said Shell would work closely with the Browse joint venture and government to keep the Browse project on track.

Premier Colin Barnett says the failure to develop a gas hub project at James Price Point is a tragedy and a missed opportunity.

A fierce opponent of a floating offshore plant, Mr Barnett said that if the project went ahead in such a form it would still bring some benefits to WA.

WA Opposition Leader Mark McGowan said the Premier's constant interfering and meddling caused the James Price Point project to be lost.

Mr McGowan said WA Labor has always said that the gas should be processed onshore first and foremost.

“We do not support offshore processing of Western Australian gas,” Mr McGowan said.

“Mr Barnett should have insisted the gas be processed onshore but should never have interfered in the commercial arrangements or the exact siting of the project onshore.

“The Premier has no one to blame but himself. His handling of the James Price Point issue has been abysmal right from the beginning."

Prime Minister Julia Gillard insists the investment phase of Australia's resources boom is yet to peak despite the Woodside decision.

Ms Gillard says the company's decision to shelve the massive project does not relate to Federal or state regulatory issues.

“It's an issue for the company, so it's for them to deal with,“ she said.

Ms Gillard said the resources boom would be at work in the economy for a long time to come.

“We haven't seen the peak of the investment phase into resources yet and we are yet to see the peak of the production phase,” she said.

Shareholders have applauded Woodside's decision, sending its stock soaring. The stock was $1.21, or 3.4 per cent, higher at $36.49 at 9am.


Police escort Woodside vehicles as they enter the James Price Point site. Picture: Kim Kirkman

Green groups welcomed the Woodside announcement and said it was a win for the Kimberley.

“There were always less environmental and socially destructive options yet governments of both persuasions – spearheaded by Liberal Premier Colin Barnett and Labor’s former federal resources minister Martin Ferguson ‑ tried to force this unwanted and unnecessary development on the Broome and Kimberley communities," Wilderness Society National Director Lyndon Schneiders said this morning.

“This development was opposed by people all around Australia and the world, but nowhere stronger than by the brave Broome community who stood up to hundreds of police alongside the Traditional Custodians who wanted to treasure their cultural heritage,” he said.

“It’s time for the Western Australian Government to look seriously at sustainable economic development for the Kimberley.”

The Aboriginal representative group set up to handle the future benefits arising from the project said it was disappointed by the decision.

Waardi Limited chairman Warren Greatorex said: “We are obviously disappointed in terms of the benefits that could have flowed to the Traditional Owners and local community.

“Waardi is still a party to the Browse LNG Precinct Project Agreement and as such we will continue to work with other parties to the agreement and stakeholders on the future position from here.

“We have always worked in the best interests of the Traditional Owners and local community and we will continue to do so.”

Waardi was ratified under the agreement last year as the administration body for the Goolarabooloo Jabirr Jabirr Native Title Claim Group.


Australian Manufacturing Workers' Union WA secretary Steve McCartney lamented the loss of the project, saying it could have employed thousands of Australian construction workers and filled local manufacturing yards for years.

Mr McCartney criticised speculation of a floating facility to process the gas, describing it as a disastrous option.

“We will lose 8000 construction jobs and have them replaced with a few hundred operational jobs,” he said.

“The biggest winners from this decision will be steel fabricators in South Korea and China, as local fabricators will not get a look in to build the facility.”

Mr McCartney said all levels of government should work to ensure onshore processing was a priority.

“We must not allow local jobs to float away,” he said.

Federal Resources Minister Gary Gray, a former Woodside executive, said Browse gas could still be developed to the benefit of WA, Australia and the Kimberley.

"What we have seen in the past past 24 hours is Woodside and the joint venturers making clear their preferred options because James Price Point is too expensive," Mr Gray.

He said Woodside and the joint venturers genuinely wanted to invest in and develop the Browse oil and gas field.

Woodside received conditional planning approval from the WA Government last week to build a $120 million camp to house more than 850 fly-in, fly-out workers at the proposed gas hub.

The company recently said it was sticking to its June schedule for a final decision on building the onshore processing plant.

But analysts believe the proposal was not economically viable because of spiralling costs and challenges securing labour.

The Anglo-Dutch petroleum giant has in recent weeks been agitating for the gas field to be developed with its cutting-edge floating liquefied natural gas vessels in a bid to offset WA's spiralling construction costs.

Mr Barnett has mounted an isolated campaign against the FLNG tankers, arguing that only a land-based solution at James Price Point would deliver the right mix of jobs and economic development to the State.


Musician John Butler was among the high-profile opponents. Picture: Lee Griffth/The West Australian

Others, including Mr Gray, argue that FLNG could be an opportunity for Australia to form a high-tech jobs and skills base. Mr Barnett told parliamentary question time yesterday that the joint venture partners had until the end of June to make a final investment decision.

"I have continuous discussion with Woodside and it's not for me to comment publicly, particularly to market sensitive information on what decisions might be," he said.

Asked by Opposition Leader Mark McGowan yesterday if he had received advice in the past week from the joint venture partners that the project would not proceed, Mr Barnett said: "I have not received advice to that effect from the joint venture partners at all. At all."

Senior sources yesterday told The West Australian that the WA Government and Canberra had been informed by Woodside of its impending announcement.

James Price Point has been fiercely opposed by conservationists and is yet to be given environmental approval by the Federal Government. One of the sources said Woodside's decision was not the end of the environmental approvals process but "if the Browse Basin is to be developed, then the joint venture partners will have to use FLNG".

It is not clear how the development would affect the up to $1.5 billion indigenous social benefits and jobs package that was contingent on the land-based site proceeding.

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#9
More details about AusGroup relisting on ASX from OSK-DMG

AusGroup has revealed the details of the next key step towards its relisting onto the ASX. The RTO companies will be Kebun Sedenak Sdn Bhd and Tropik Sentosa Sdn Bhd (Target Group), whose assets include freehold land and a golf resort in Malaysia. "As insufficient information was disclosed, our valuation of $0.66 is for AusGroup only, and we leave as potential upside any incremental value arising from the RTO," says OSK DMG in a note.

The Target Group owns about 1,015 acres of freehold land in Iskandar Malaysia and intends to acquire another 47 acres for a total of 1,062 acres. They also own The Legends Golf & Country Resort, which is a master-planned resort comprising one 18-hole Jack Nicklaus-designed championship course, one 9-hole Arnold Palmer-designed course and other assets. The main business of the Target Group after the RTO will be property development and management.

http://www.theedgesingapore.com/the-dail...4-mil.html
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#10
If your fundamentals are strong, there is no need to embark on complicated restructurings to "unlocked" value.

Only companies with weak fundamentals need such complicated deals.

Already warned buddies long time ago.

Take care
Vested Odd Lots
GG

(08-05-2013, 12:57 PM)CityFarmer Wrote: More details about AusGroup relisting on ASX from OSK-DMG

AusGroup has revealed the details of the next key step towards its relisting onto the ASX. The RTO companies will be Kebun Sedenak Sdn Bhd and Tropik Sentosa Sdn Bhd (Target Group), whose assets include freehold land and a golf resort in Malaysia. "As insufficient information was disclosed, our valuation of $0.66 is for AusGroup only, and we leave as potential upside any incremental value arising from the RTO," says OSK DMG in a note.

The Target Group owns about 1,015 acres of freehold land in Iskandar Malaysia and intends to acquire another 47 acres for a total of 1,062 acres. They also own The Legends Golf & Country Resort, which is a master-planned resort comprising one 18-hole Jack Nicklaus-designed championship course, one 9-hole Arnold Palmer-designed course and other assets. The main business of the Target Group after the RTO will be property development and management.

http://www.theedgesingapore.com/the-dail...4-mil.html
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