KUCHING: Boilermech Holdings Bhd (Boilermech), a biomass boiler solutions group, is staying on track with its tried and tested business model and strategy which has been proven in view of stellar results seen for its financial year 2013 (FY13).
The group’s FY13 results saw a top-line of RM165.8 million while the net profit of RM23.7 million was “slightly above expectations” on improved margin, said RHB Research Institute Sdn Bhd’s (RHB Research) analyst Chaw Sook Ting.
“Due to a change of FY end from April to March, FY13 only comprised 11 months’ contribution,” said the research analyst in a stock update yesterday.
“Hence, the group’s annualized net profit of RM25.9 million represents a 34.3 per cent year on year (y-o-y) jump compared with FY12 full-year net profi t of RM19.3 million, on the back of a 20.9 per cent jump in annualised revenue.
She pointed out that the better performance was largely attributed to increased manufacturing activities, deliveries and installation of boilers.
Overall, margins improved due to higher-margin projects in the year; earnings before interest and tax (EBIT) margin rose from 15 per cent in FY12 to 18.2 per cent in FY13, she noted while adding that the company proposed a final single tier dividend of two sen.
“Boilermech remains in a net cash position despite completing a land purchase in last year. It has total cash and liquid investments of RM40.1 million, with net cash per share of 15.1 sen as at end- March 2013.
“Going forward, Boilermech sees no changes in its business model and direction, as it will continue to focus on its forte in biomass boiler manufacturing while seeking opportunities to expand horizontally into other regions, as well as vertically by offering other renewable energy solutions.
“We expect an expansion in production capacity by the second half of this year,” Chaw stated as she revised the stock’s fair value to RM1.70 per share, pegged to an unchanged price to earnings ratio of 14 times.