Rotary's Q1 profit halved to S$7m as revenue falls

Singapore

ROTARY Engineering's net profit halved to S$7.07 million for the first quarter ended March from S$14.4 million a year ago.

The oil and gas services firm's revenue fell 55 per cent over the period to S$89.39 million which the firm attributed to the completion of major projects.

Earnings per share accordingly declined to 1.2 Singapore cents from 2.5 Singapore cents.

No dividend was declared. The group's total order book stands at S$207 million, of which 55 per cent involves overseas projects.

As at March 31, 2015, Rotary's cash and short-term deposits stood at S$115.2 million with net cash position at S$104.9 million.

Rotary Engineering said that although the outlook in the oil and gas industry remained uncertain, it was "actively developing its business in oil storage terminals through direct negotiations and bidding for projects in Asean and Gulf Cooperation Council countries". It is also seeking related business opportunities to complement existing activities.

Despite the dip in oil price, demand for liquid bulk storage infrastructure is expected to continue, said Rotary chairman and managing director Roger Chia Kim Piow.

"Demand for storage infrastructure is underpinned by growth in the consumption of energy and petrochemical products as Asia's fast-growing economies undergo rapid urbanisation," he said, adding that this in turn has led to a rise in demand for terminals, distribution hubs, refineries and petrochemical complexes throughout the region.

As Singapore's land constraint has resulted in a spill-over of the demand for liquid bulk storage into Malaysia and Indonesia, Rotary plans to participate in bids or negotiations for several projects that are coming up in these geographies.