21 October 2014

Triyards Financial Year ended 31 August 2014 Report Summary - October 2014


The company recorded US$27m net profit attributable to shareholders (drop 15% y/y) on the back of total revenue of US$269m (drop 2% y/y). This translated to net profit margin of about 9.9% (drop 1.5%).

FY2014 EPS was 9.04 US cents compared to 11.71 US cents for FY2013. NTA was 57.37 US cents for FY2014 compared to 49.90 US cents. ROE was around 17% which to me still not too bad, although the ROE was lesser when comparing to previous year.

Trailing PE of Triyard is now around S$0.675 / 9.04 US cents or about 6.0x. Trailing PB ratio is 0.94. The company proposed 1.0 SG cents final dividend, which translated to be around 1.5% final dividend yield.



Group’s revenue decreased by US$6.5 million (2%) to US$269 million for FY14 when compared to the corresponding financial year (“FY13”). The decrease was mainly attributable to lower revenue recognised from two self-elevating units (“SEUs”) of BH450 series. Both units were at the peak of the construction progress in FY13 which resulted in recognition of higher revenue. As at 31 August 2014, the first unit was fully completed and  he second unit was in its sea trial stage.

This decrease was partially offset by higher revenue recognised from two SEUs of BH335 series which have progressed into advanced stage of construction during the second half of FY14. Typically, lower revenue is recognised when a vessel is at its early stage of construction where significant amount of time is consumed for  esign, planning and engineering and at its final stages of completion where substantial amount of time is spent on testing, commissioning and sea trial activities, as compared to a vessel at mid stage of its construction where significant amount of fabrication, construction and installation activities takes place.

Gross profit

Group’s gross profit increased from US$49.7 million in FY13 to US$51.9 million in FY14, mainly due to different product mix, as well as higher gross profit margin derived from offshore/industrial fabrication and ship repair activities.

Cash flows

The Group recorded net cash inflow in operating activities of US$7.7 million in FY14, mainly due to lower
inventories, increase in trade and other payables. These were partially offset by increase in trade receivables and increase in other receivables and other current assets.

Net cash used in investing activities was US$13.6 million and US$6.9 million in FY14 and 4Q14 respectively, spent mainly for the purchase of operating equipment and upgrade of the facilities at one of the yards in Vietnam.

Net cash generated from financing activities was US$13.1 million in FY14, as a result of net loan drawdowns to finance the working capital for the projects. Net cash used in financing activities for loan repayment was US$5.3 million in 4Q14.

Management Comment on the Outlook

With the rise of new players in Asia, especially from China, entering into the space TRIYARDS is in, the Group expects the next 12 months to be more competitive and challenging. Demand for liftboats in Asia is expected to remain buoyant, especially with increasing acceptance of their use. The demand for medium to large sized offshore support vessels should stay relatively healthy although recently it was noted decrease in oil prices as a result of slowdown in capital expenditure in Oil & Gas sector.

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