Company News

PEC secured a contract win worth ~S$132m for a refinery project in the Middle East, which is scheduled to complete by Apr-16.

Technics Oil and Gas Limited’s associate company won contracts worth S$7.2m for works related to SW and Ballast systems for a Singapore customer.

Tee International is expanding into the energy business and makes its first foray into the Philippines by subscribing to a 21.05% stake in PowerSource Philippines for ~S$4.87m.

Technics oil Gas Magic Twenty

Technics crossed the magic $20m hurdle this year with an 8.2% increase in the bottom line. FY12 revenue rose 19% to $149.7m, and the gross margin rose to 39% from 37% last year due to a higher proportion of EPCC contracts recognised this year. BUY maintained with TP $1.20.

Norr Offshore Group listing in Taiwan proceeding smoothly. We are expecting pre-IPO in Jan-13 and IPO near the end of the calendar year. Meanwhile, we have made adjustments to our model as the subsidiaries have been diluted, deconsolidated, and now contribute via the Associates line. The major line differences are Revenue (which falls to about S$112m in FY13F), the surge in Associate income, and Minority Interest which falls to nearly zero. As EPCC will be a larger part of revenue, we expect overall margins to improve. Technics will also be in a net cash position from FY13F.

Low-cost yard in Vietnam profitable, Batam yard busier, jetty next CY. We understand that the yard in Vietnam is operating profitably, and operations in Vietnam and Batam are being ramped up. After clearing some approvals processes, we expect the jetty in the Singapore yard to begin operations shortly after the new year. These are the main sources of growth for Technics.

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Technics Oil & Gas plans to spin off units for a separate listing

Fair value of $1.22

Technics Oil & Gas said it intends to spin off its subsidiaries in the contract engineering segment specialising in marine industry business for a separate listing in Taiwan.

The plan is to list the subsidiaries, Norr Systems Pte Ltd and Wecom Engineering Pte Ltd, collectively as the Norr and Wecom Group on the Gretai Securities Market of Taiwan. Technics said the Norr and Wecom Group has 'reached a sufficient scale to justify a separate listing'.