Viking

Viking - The co. has very limited coverage, with both little retail and insti interests, however as a guide, the grp saw a weaker FY12, with rev at 87.3m, +4% and net profit at $1.2m, -78% yoy. The lower profitability resulted from higher than expected project cost in SG coupled with lower margin in expanding overseas whereby aggressive prices are required to compete against lower cost local service provider. Other Income was also ower than the prior year due to the higher one-time gain on disposal of marketable securities as well as gain on bargain purchase on the industrial property in the prior yr. The Grp continues to hold the view that the O&M industry conditions is expected to be challenging in the near term and this is especially so for the marine sector. This is typified by the delays in commencement and progress of projects and the smaller packages in terms of contract values. Additionally, continue to see aggressive price action on the part of the industry players in order to out-bid each other in tendering for new projects. Going forward, aims to exploit new growth initiatives in the area of emerging markets overseas, new customer acquisition, and expanding service and repair opportunity. The Group is seeing some some recent successes in the overseas emerging markets and new customer base, and seeing better jobs awarded in the area of services and repair and will continue to focus in these areas to drive further growth in the future. Regarding its rights issue, the grp is undertaking a undertaking a renounceable and partially underwritten rights issue of 119.5m shares @ $0.08 strike price, with up to 119.5m free detachable warrants (stike price @ $0.138) on the basis of 1 Right Share for every five 5 existing Shares. The Co is undertaking the Rights cum Warrants Issue to strengthen the financial position and capital base of the Company. The Rights cum Warrants Issue will also provide the Shareholders with an opportunity to further participate in the equity of the Company, and will allow the Group to be less reliant on external sources of funding. As for now, prospects going forward for Viking remains Vague, as the grp attempts to diversify and explore newer opportunities. If you and your client do not view this as a reliable indicator of future growth, you could choose to sell the rights when it begins trading, or alternatively if you have a more positive view on the grp you could subscrive for the rights issue.