早报网www     powered by Google
企业公关网

Federal sees 10-15% yearly Asia profit growth
Federal sees 10-15% yearly Asia profit growth

(2007-10-17)

  SINGAPORE oilfield equipment firm Federal International is confident of growing Asian sales and earnings by 10 to 15 per cent per year, and will expand its power plant and offshore marine ventures.

  The firm said yesterday that it is targeting an extra US$30 million in equipment sales next year from previously untapped Indian and Middle East markets, as demand for energy exploration grows with oil hitting record prices of more than US$86 a barrel.

  'The world is energy hungry, and we're using this opportunity to get our share of the industry. There is a piece of cake for everyone,' said Federal International's chief operating officer Sanjeev Gupta in an interview.

  The company has just bought a second ship to convert to oil storage, a booming industry in oil trading hub Singapore, after having since 2006 diversified from its traditional business of producing and distributing specialised oil valves.

  'This is the best way of getting a consistent, long-term income for us because the trading business always fluctuates,' said Mr Gupta.

  The firm has already won a US$91 million, 10-year charter from PetroChina for its first Floating & Storage Offloading (FSO) vessel, and Mr Gupta said it has been short-listed for a 'much bigger' contract from Malaysian state firm Petronas for the second.

  Federal International, which has a stock market value of US$175 million, also expects by the end of the year to name a project to build and operate an Indonesian power plant worth around US$25 million, which would add to two power plant projects announced since June in Indonesia and Singapore.

  It is also targeting winning three more power projects in Indonesia, which is faced with soaring power demand and aims to build 10,000 megawatts of additional capacity by 2010.

  The company has invested almost S$100 million on capital expenditure this year and expects to spend more than that next year. Mr Gupta said its low gearing of less than one per cent meant it could borrow to fund new projects.

  The firm is projected to see full-year 2007 profit of S$15.9 million, according to consensus figures from two analysts, after it doubled net profit in 2006 to S$10.2 million.

  OCBC Investment Research analyst Serene Lim, who has a 'buy' rating on the stock, said Federal's price-earnings ratio of about 14 times forecast earnings compares favourably against oil and gas-related peers.

  Singapore-listed Ezra trades at 28 times and Swissco International at 37 times, while top global oil services firm Schlumberger is at 26 times.

  'If the new power plant and the FSO vessel projects come onstream, it should look even more attractive. But we still see some execution risk because the company is quite new to such projects,' Ms Lim said. -- Reuters

《The Business Times》


企业公关网总览