MTQ share price: Touched 95 cents recently, the highest in nearly 3 years.
Kuah Boon Wee, CEO, at this afternoon's briefing for analysts and the media at Peach Garden in OCBC Centre. Photo by Leong Chan Teik
The performance reflects the strengthening of the business, whose revenue in the six months ended Sept rose 12% to S$44.6 million, it was announced this afternoon.
MTQ is largely in the business of repairing and servicing oilfield equipment such as Blowout Preventers (BOP), an esoteric category which was in the public limelight when a BOP failed dramatically in the Gulf of Mexico recently and caused one of the world’s worst oil spills.
As a result of the crisis, BOP owners are increasingly conscious of the need for certification and regular maintenance of the equipment, which may yet bring more business to companies such as MTQ.
MTQ’s pre-tax profit in 1H of the current financial year fell 19% to $6.9 million - but it would have edged up 4% if a one-off $1.9 million gain from the disposal of quoted shares in the 1H of the previous year were excluded.
Net profit came up to S$5.4 million, which was 25% lower year-on-year (due to the absence of a share disposal gain and due to a higher effective tax rate).
In August this year: Mr Kuah explaining the workings of a Blowout Preventer to NextInsight readers on a visit to MTQ. Photo: Leong Chan Teik
* Oilfield engineering’s revenue rose by $1.3 million, or 7%; and
* Engine systems’ revenue (which is Australia-based) grew 13%, thanks in part to the new Bosch distribution business, which is still in the early stage of growth, according to CEO Kuah Boon Wee during an analyst-cum-media briefing this afternoon.
The best news for shareholders is probably the doubling of the interim dividend to 2 cents a share.
The payout would amount to $1.76 million, and shareholders can opt to be paid in cash or in MTQ shares under its scrip dividend scheme.
MTQ could afford the 2-cent payout because of its healthy balance sheet with a net cash position of S$14.7 million, said Mr Kuah.
That begged the question of whether the final dividend would be higher than the 2 cents a share paid in each of the last two financial years (the interim was 1 cent a share each time).
Mr Kuah, however, declined to give a view on the final dividend.
Group financial controller William Fong noted that MTQ’s business continued to enjoy strong cashflow from operations. In the first half of the current FY, the inflow was $7.4 million, compared to $5.8 million previously.
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