MTQ Corporation’s operations continued to generate excellent cashflows in FY12 (ended 31 March).
The cashflow came up to S$20.6 million, which was close to the $22.4 million generated in the previous year.
The Board of Directors recommended a final dividend of 2 cents per share, unchanged from the previous year. The interim dividend was 2 cents (also unchanged from FY11).
The steady dividend fulfilled the assurance given by MTQ's executive chairman, KK Kuah, at the AGM a year ago when asked if the dividend stream would be affected by MTQ's acquisition of Premier Group sending the company into a net debt position.
He had said: "We have no reason to believe we would need to make any adjustment in this area."
At the same event, CEO Kuah Boon Wee had said: "It is a considerable acquisition but we have good cashflow and we can afford it."
MTQ increased its bank borrowings to S$45.9 million (FY11: S$28.3 million) mainly to finance the acquisition of Premier Group.
MTQ's cash stood at S$27.3 million (FY11: $23.8 million).
MTQ’s 4-cent total dividend translates into a yield of about 5% based on a closing share price of S$0.79 (as at 30 March 2012).
The dividend payout ratio stood at 25% for FY2012.
MTQ is a regional engineering specialist in the fabrication, repair and maintenance of oilfield equipment.
Revenue grew by 40% year-on-year to S$128.4 million mainly due to contributions from the Premier group, which "performed better than expected."
In July 2011, MTQ acquired 100% of Premier Sea & Land, a provider of oilfield equipment primarily used in drilling applications, for US$19.3 million ($23.7 million).
MTQ's net profit attributable to shareholders, which included a write-back of tax provision of S$3.4 million, surged by 37% yoy to S$14.6 million.
Commenting on the outlook, CEO Kuah said: “We are pleased with the Group’s overall performance in FY2012. In particular, special mention should be made for our recent acquisition, the Premier group, whose performance has exceeded our expectation.
“Current oil price levels and underlying demand encourage drilling activities. We are fairly optimistic that strong drilling activities will continue to stimulate fresh demand for our services and we are well placed to benefit from our expertise in this field.
“We will exercise caution over the medium term horizon as the global economic environment remains subdued. Our goal remains to build and enhance our range of subsea services and products, with emphasis on drilling contractors and other industry players.”
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