Rotary: Co posted poor 1Q rev of $130.5m -27.4%yoy -18.2%qoq and net profit of $5.3m -61.5%yoy -80.3%qoq. Dip was attributed to fewer projects in Sg and recognition timing for SATORP project. Co expects SATORP construction rev to be recognized in 2H2011 which shld boost topline figures...
Gross margins are expected to remain constant approx 15-20% for total order book of $824m Co intends to utilize part of cash holdings of 115.7m and future cash earnings from SATORP proj to acq minority stakes (10-15%) in future BOO and BOT projs with clients…
The rationale is to develop a stable recurring earnings base using the excess cash and develop strategic partnerships. Future sizeable project also includes US$250m Fujairah Oil Terminal to start this quarter CIMB maintains Outperform but lower TP from $1.29 to $1.26, remains preferred pick in EPC space.
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