Singapore: Kreuz Announces Third Quarter Results

Kreuz Holdings Limited , a subsea service provider for the oil and gas industry, reported that backed by a 150% jump in revenue from US$13.6 million to US$34.1 million, its profits had quadrupled for the three months ended September 30, 2011 , as compared to the previous corresponding period for FY2010.

Mr Kurush Contractor, Executive Director and CEO of Kreuz Holdings, said: “We are pleased to record yet another successful quarter following our fifth set of contract wins from Swiber Group worth approximately US$57.5 million. While our focus remains on growing the Group’s business, we will continue to execute our projects with quality, safety and efficiency, maintaining our commitment to clients for on-schedule job completions. While the global macro-economic outlook is clouded with uncertainty, the underlying fundamentals of the oil and gas industry remain encouraging. As such, there remains a positive outlook for demand for subsea services. Our current order book of approximately US$185 million provides earnings visibility which we will continue to build on towards future growth.”

As part of the Group’s efforts to broaden its customer base, bidding and executing projects for major offshore third party construction companies has been intensified. In 3QFY2011, revenue from third party customers accounted for almost 81% of total revenue. Gross profit margin remained at a healthy level of 25.0% despite bearing the impact of higher sub-contracting costs for third party assets including Diving Support Vessel (“DSV”) chartering expenses incurred during the same period. Cost of sales increased by 188.3% to US$25.5 million in 3QFY2011, which was partially offset by an increase in other operating income due mainly to foreign exchange gains arising from appreciation of the US currency against the Singapore currency for the quarter. Profit before tax also increased by 308.7% from US$1.7 million in 3QFY2010 to US$6.8 million in 3QFY2011.

For the nine months ended September 30, 2011 (“9M2011”), revenue increased by 235.4% or approximately US$80.4 million from US$34.1 million in 9M2010 to US$114.5 million in 9M2011 with gross profit margin increasing from 31.9% in 9M2010 to 32.5% in 9M2011. Net profit margin increased from 13.7% in 9M2010 to 22.3% in 9M2011, if adjustments for non-recurring and non-operational expenses were made, namely foreign exchange gains/losses and IPO related expenses, net profit margin would have been increased from 17.2% in 9M2011 to 21.8% in 9M2011.

On the back of its strong operating results, the Group continued to grow its net asset value per share which increased from 16.67 US cents as at December 31, 2010 to 21.71 US cents as at September 30, 2011. Earnings per share increased from 0.20 US cents in 3QFY2010 to 1.15 US cents in 3QFY2011.

Outlook

Despite the uncertain global economic outlook, Asia’s demand for energy continues to grow. Activity levels, in terms of projects, tenders and awards, in most Asian markets remain positive even though competition remains keen. A key driver of the oil and gas industry is the aggregate capex spending of oil and gas companies on exploration and production activities. We believe that the current oil and gas price levels provide a strong impetus to energy majors to continue with their capex plans. Consequently, the demand for offshore subsea services shall continue to remain strong.

[mappress]

Source: Kreuz, November 08 , 2011