Rising Tide

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Company Profile

Established in 1990 and listed in Mar-2011 at $0.35, Dyna-Mac Holding Ltd is an engineering, procurement and construction (EPC) in the offshore oil & gas and marine construction industries. The firm focus mainly on FPSO and FSO topside modules, onshore plants and sub-sea products for the O&G industry.

The group main yard is located in Singapore with presence in Malaysia, China, Indonesia and Philippines through partnerships.

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Keppel Corp. is a major shareholder of the company, holding 24% or 250M shares.

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Until 2016, most of the company business were from Asia Pacific. From 2018, Europe was the firm major revenue contributor.

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Financial  (FY December)

Revenue peaked in FY14 and with weakening oil prices, it started to decline sharply. COVID-19 added further pressure in her business leading to an existential crisis.

The company was also burdened when her founder & CEO Desmond Lim passed away in Oct-2019. He was replaced by Lim Ah Cheng, a executive director at Keppel Sea Scan and Green Scan in Mar-2020.

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Order-book gradually started to improve meaningfully in 3Q20 with increased activities in China. This resulted in revenue staging a recovery as of 1Q21. Financial returned profitable in the same quarter with an operating margin of 2.1%.

As order-book enquires improves, Dyna-Mac-Mac is now looking to increase capacity in both Singapore and China. 

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To strengthen her balance sheet, the company had been disposing physical assets or later reinvestment. 

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Strategy

In addition to FPSO topside modules, Dyna-Mac is expanding into green energy modules & solutions for onshore & offshore applications in hydrogen, ammonia and LNG fuel. 

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Opinion

Since IPO in 2011, NTA peaked in FY14 and have deteriorated rapidly from $0.18 to $0.02. This could limit the firm's ability to engage sizeable projects without having to raise fund from the debt or equity markets. 

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However, with oil price recovery, we should see substantial business opportunities to keep the company assets utilisation rate at optimal level; enabling the firm to gradually improve her balance sheet and outlook.

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Surviving an existential crisis, Dyna-Mac now looks like a leaner-meaner organisation riding on a rising tide.