MTQ

MTQ: 3QFY14 net profit was $6.4m, reversing last year’s losses of ~$1m, while revenue soared 106% y/y to $75.1m, due to contribution from Neptune Marine Services, which became a subsidiary in Dec last year. Oilfield Engineering business registered healthy incremental organic growth across its geographical locations, offset slightly by lower revenue from Engine Systems largely due to the depreciation of the Australian Dollar. Staff costs, that doubled to $11m due to the consolidation of Neptune was offset by lower other operating expenses due to the absence of a fair value loss associated with acquiring Neptune last year. While Neptune was instrumental towards boosting earnings, acquisition led growth will taper off in historical comparisons from next quarter. The Oilfield Engineering business in Bahrain is progressing well in achieving profitability on the back of market activities. In addition, MTQ’s oil field operations will be enhanced with the acquisition of Binder, which specializes in pipe supports for the oil and gas industry and operates a manufacturing facility in Perth with another 50% owned plant in Jakarta. At NAV of $0.99, MTQ is trading at ~1.6x P/B