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Dyna-Mac

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FPSO: Floating, production, storage & offloading vessels.

FSO: Floating, storage & offloading vessels.

Rising Tide

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.

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

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

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.

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. 

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

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. 

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. 

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.

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