Rotary

Rotary: Weak set of results which were below estimates. Rev at $133.4m, +2% yoy and -2.8% qoq, while net profit at $3.2m, -41% yoy and -62.4% qoq. Gross margins at 14% vs 17.7% yoy. Grp note that the weaker results was partly due to the closing of the qtr before the Grp was able to get started on some projects which had been delayed, accounting for the fairly flat topline, while dip in gross profit margin was attributed to thinner margins for a few projects secured at exceedingly competitive prices in recent times due to keen competition. Add that in addition to delayed commencement, some projects have also seen delays in award of contracts due to the global economic uncertainty which triggered a credit situation. Still, mgt optimistic citing numerous upcoming opportunities that hold serious promise. Continues to develop business through direct negotiations and bidding for projects in ASEAN, South Asia and Gulf Cooperation Council countries. Menawill remain a key market.