I am very pleasantly surprised by the doubling of interim dividend!
Business Times - 04 Nov 2010
MTQ's H1 profit drops 25%
The decline was due to gains on the disposal of assets in year-ago period
By JOYCE HOOI
OIL-FIELD equipment engineering company MTQ Corporation has doubled its interim dividend from one to two cents a share, after reporting a 25 per cent slide in first-half 2011 net profit to $5.4 million, down from $7.2 million.
The decline in the bottom line was largely because of gains on the disposal of assets in the year-ago period.
Excluding a $1.9 million one-off disposal gain in H1 last year, profit before tax for the latest H1 rose 4.3 per cent.
Revenue grew 12 per cent to $44.6 million on stronger demand in the original equipment manufacturer repair segment, new business from acquisitions and an improvement in the rental business.
MTQ's oilfield engineering division - which repairs and maintains the blowout preventers on rigs, among other things - saw H1 revenue rise $1.3 million or 6.5 per cent.
Its engine systems division lifted revenue 13.2 per cent, boosted by contributions from Bosch Superstore operations in Australia.
MTQ's chief executive Kuah Boon Wee said that the post-oil spill scenario in the Gulf of Mexico bodes well for the company.
'All the oil majors are going to be a lot more focused on the level of maintenance for their rigs,' he said. 'There will be a higher threshold for compliance among rig owners and rig operators,' he said.
According to Mr Kuah, MTQ's new plant in Bahrain is expected to be completed on time and within budget, with operations to start in 2011.
'Construction is quite advanced and the machinery is arriving,' he said. 'It won't have much of a profit and loss impact until next year. We are confident that our facility will be better than anybody else's.'
MTQ's earnings per share for the six months ended Sept 30 stood at 6.11 cents, down from 8.16 cents a year earlier.
Directors have recommended an interim dividend of two cents a share, which shareholders can opt to receive in shares or in cash. 'It reflects our sentiment that our outlook is fine,' Mr Kuah said.
Mr Kuah resigned as PSA International's chief executive for the Middle East and South Asia earlier this year to take the helm at MTQ, as part of the group's succession planning.
'It's very different. As I'd joked, this is the smallest company that I've ever worked in in my life, but I enjoy it,' he said. 'I enjoy the different challenge and having an owner's perspective.
'When you have a smaller group, that's probably the biggest challenge. You need to work with resources you have. And if you don't have them, you have to add them carefully.'
Mr Kuah's father Kuah Kok Kim retains some executive functions and remains in an advisory role as MTQ's executive chairman.
The group's counter closed unchanged at 92 cents yesterday.