OIR BITES: Dyna-mac's 1Q net profit fell 51% YoY

Stock Name: Dyna-Mac
Company Name: DYNA-MAC HOLDINGS LTD.

Research House: OCBC

Price Call: SELL

Target Price: 0.34

OIR BITES: DYNA-MAC'S 1Q NET PROFIT FELL 51% YOY 23 Apr 2012

For internal circulation only Dyna-mac announced its results last Friday with 1Q12 revenue and net profit falling by 39% and 51% YoY to S$23.5m and $3.3m respectively (1Q11: revenue of S$38.6m and net profit of S$6.8m). The group explained that revenue recognition was slower this quarter because most of its projects are in early stages of fabrication. In addition, gross profit margin was also lower (1Q12: 28.8%; 1Q11: 36.9%) due to fewer variation orders and projects completions. In terms of orderflow, the group also announced new fabrication contracts with FPSO operators Bumi Armada and SBM worth a provisional sum of USD31.6m, bringing its net orderbook to S$201m as of 20 Apr 2012. The majority of the projects are expected to be completed in 2012. We currently do not have a rating on Dyna-mac. According to Bloomberg, there is one SELL with a fair value estimate of S$0.34