Sinwa CEO Bruce Rann in one of the three warehouses of Sinwa in Joo Koon Circle. Photo by Sim KihSINWA LIMITED has gone from $0.2 m in net profit in 9M2012 to $6.5 m in the corresponding period this year -- thanks in no small part to the sale of a liftboat in March 2013.Following the sale of liftboat KS Titan 2, Sinwa's administrative expenses fell by $2.6 million, or 15.7%, to S$14.1 million as stacking costs and depreciation of fixed assets were substantially lowered in 9M2013.
In addition, some of the sale proceeds went to repaying Sinwa's borrowings, resulting in a $1.94 million fall in financial expenses.
In addition, some of the sale proceeds went to repaying Sinwa's borrowings, resulting in a $1.94 million fall in financial expenses.
Sinwa and its 50-50 joint venture partner sold the liftboat for S$52 million.
Sinwa, the largest operator in the marine supply, offshore and logistics industry in Singapore, reported revenue of S$104.2 million in 9M2013.
That was an increase of 13.2% year-on-year, largely due to an increase in customer base for its marine, offshore supply and logistic business.
Gross profit increased at a slower pace of 6.0% to S$26.2 million as a result of rising cost of sales due to inflation as well as stiff competition in the market.
Gross profit margins declined to 25.2% in 9M2013 compared to 26.9% a year ago.
The Group paid a total of 3.5 cents per share of dividend in 9M2013, mainly with proceeds from the sale of the liftboat.
Gross gearing dropped from 22% as at end-Dec 2012 to 13% as at end-Sept 2013. The Group’s cash and cash equivalents stood at S$23.6 million as at end-Sept 2013.
Sinwa's shares traded recently at 20.5 cents, a discount to the NAV as at end-Sept of 27.31 cents.
Assuming 4Q earnings per share is the same as 3Q2013 of 0.48 cent, the full-year's EPS would be 2.41 cents which translates into a PE of 8.5x.
Investors will be following closely the January 2014 start of a trial of Suit 875 filed by Sinwa claiming damages against joint venture partner Morten Innhaug for breach of fiduciary duties.
The outcome of the suit and other related developments could lead to the sale of the seismic vessel by the joint venture.
The vessel has been classified as an asset held for sale in Sinwa's books. Sinwa has pegged a net value of $15.1 million on its share of the vessel.
Sinwa's warehouse: Packed with a wide assortment of supplies ordered by ship operators. Though it's a business with relatively low barriers to entry, Sinwa has achieved economies of scale and enjoyed gross profit margins of 25.2% in 9M2013. Photo by Sim KihRecent stories:
SINWA: Growing its business rapidly with new global client Sodexo
SINWA Growing Again; SWISSCO Charters Out Boats
