Gaylin Achieves S$10.5 Million in Earnings for FY2013, Continues Growth in Asia

GaylinGaylin Holdings Limited, one of the largest Singapore-based rigging and lifting solutions providers to the global offshore oil and gas (“O&G”) industry, recently reported a net profit of S$10.5 million for the 12 months ended 31 March 2013 (“FY2013”) underpinned by a 7.9% growth in revenue to S$77.1 million.

The improved topline in FY2013 was boosted by a robust fourth quarter, which saw revenue of the Group rise 33.2% year-on-year to S$24.1 million, compared to S$18.1 million in 4QFY2012. This was mainly due to revenue contribution from Allseas Marine Services Pte Ltd, a ship supply business which Gaylin acquired for S$1.5 million in January 2013, as well as stronger orders from customers based in Asia and Europe for their projects. Collectively, sales from these two markets coupled with Malaysia, rose 50.5% to S$37.2 million in FY2013 from S$24.7 million in FY2012.

In line with its revenue growth, the Group’s gross profit increased by 5.1% to S$24.9 million in FY2013 from S$23.7 million a year ago. Gross profit margin slipped marginally from 33.1% to 32.3% in FY2013.

The improved revenue, however, brought about higher distribution costs in FY2013 which rose 35.4% to S$2.9 million in tandem with the Group’s business expansion. Meanwhile, administrative expenses also increased by 63.0% to S$7.6 million. The hike was due to a number of reasons that included, amongst others, a one-time IPO expenses of S$0.6 million, an increase in staff cost of S$1.3 million to support business expansion, acquisition-related costs of S$0.2 million and a donation of S$0.4 million as part of the Group’s Corporate Social Responsibility initiatives.

Desmond Teo, Executive Director and CEO of Gaylin, said “Despite incurring higher expenditures due to our IPO listing, business expansion and other activities, we managed to keep our gross margin and bottom line healthy in FY2013. In view of this, I am pleased to recommend a first and final cash dividend of 0.8 Singapore cents per share for FY2013. This reflects a dividend payout of 32.9% which is aligned to what we had planned during our IPO. ”

Based on 432 million ordinary shares in issue, the Group’s earnings per share (“EPS”) for FY2013 and net asset value per share (“NAV”) as at 31 March 2013 was 2.43 Singapore cents and 20.76 Singapore cents respectively. This compared to EPS of 4.32 Singapore cents for FY2012 and NAV of 11.65 Singapore cents as at 31 March 2012, which were both based on 300 million ordinary shares in issue.

Outlook

The Group is cautiously optimistic that the O&G industries will remain positive in the next 12 months and remains committed to strengthen its standing as one of the largest rigging and lifting solutions providers not only in Singapore, but in the region.

“Our focus for much of FY2013 was to grow Gaylin’s operations in Singapore and the region through organic expansion and acquisitions. We managed to achieve this successfully through the acquisition of Allseas Marine and our enlarged footprint in Malaysia. Looking ahead to FY2014, we will continue to actively look for opportunities to expand our operations into Asian markets through strategic acquisitions and collaborations,” reiterated Mr Teo.

As part of these regional expansion plans, the Group had entered into a framework agreement for the proposed acquisition of Lv Yang (Tianjin) Offshore Equipment Co. Ltdfor S$3.5 million in March 2013. PRC-based Lv Yang is involved in the supply and manufacture of rigging and lifting equipment and provision of related services.

Teo said, “Through Lv Yang, Gaylin will gain a foothold in the PRC market. We are definitely excited about the potential business and growth opportunities that the company will bring.”

As for its new facilities in Tanjung Langsat in the State of Johor, Malaysia, the Group expects the full operations to commence within the second half of year 2013.

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