Dyna-Mac

Dyna-Mac: Results came in below street estimates as 4Q14 net profit plunged 56.6% y/y to $4.0m, bringing full year earnings to $24.8m (-13.7%), weighed higher costs at both gross and operating levels

Despite the 4.6% revenue drop to $62.9m in 4Q14, FY14 revenue rose to $318.6m (+18.3%), on higher volume of projects in Singapore and overseas yards.

For the quarter, gross margin improved to 31.4% from 26.5% in 4Q13 (FY14: 22.6%) but bottom line was hit by a $3.8m fair value loss on financial derivatives and sharp spike in admin expenses to $11.3m (+51%) on higher headcount.

Balance sheet has deteriorated from a net cash position of $25.7m as at end-FY13 to 0.13x gearing in FY14, mainly due to a rise in trade receivables (+31%) and inventories (14-fold).

Accordingly, management cut its first and final DPS to 1.5¢ from 2¢ in FY13.

Net order book grew to $353.7m, with completion extending into 2016. This includes a total of $149m in new orders secured in 2015 to-date, comprising $89m for the construction of 10 FPSO topside modules for the Catcher oil fields in the North Sea and $60m for six FPSO topside modules destined for offshore Angola.

At $0.335, Dyna-Mac trades at 9.3x forward P/E and 1.7x P/B.