Rotary

Rotary: Has recently won several contracts worth a total of $80m. The contracts are as per follows: 1) Rotary achieved a breakthrough into the LNG space with its first contract win, to build tankage works for LNG storage tanks in Rayong, Thailand. 2) Alongside a consortium, Rotary was awarded a “Very Large Crude Carrier” (“VLCC”) jetty contract in Fujairah, UAE, where Rotary will perform the jetty topside works. 3) New customer Croda has selected Rotary to perform various construction packages for its Alkoxylation plant located on Jurong Island. The latest contracts win takes Rotary’s order book to ~$400m, stretching revenue visibility over the next year. Rotary’s recent quarterly results, saw the group reporting an outstanding 2Q14 with net profit of $13.1m (+155% y/y) taking 1H14 earnings to $27.4m (+259% y/y), and putting it in good stead to beat the street’s FY14 forecast of $47.1m. Revenue swelled 51% y/y to $190.8m on increased business activities as execution of its major projects gained momentum. Gross margin widened 4.7ppt to 16.6%, augmented by productivity growth. Efficient project management execution will be key to sustained margin expansion.