Falling Knife of the Week: Swiber Holdings

Swiber Holdings  (SGX: AK3) closed at S$0.56 on Thursday, having fallen around 7% since last Friday’s close. This makes the share this week’s Falling Knife.

Swiber is an integrated construction and support services provider to the offshore oil and gas industry and it operates across the Asia Pacific, Middle East and Latin America regions. It has won many accolades which include: Best under a Billion by Forbes Asia; Top 100 Brands by Brand Finance; and Singapore Corporate Governance Award by the Securities Investors Association (Singapore), or SIAS.

On 15 May, the firm released its first quarter results where it posted a 35.6% year-on-year decline in revenue to US$199.5 million. The steep decrease in revenue was because significant revenue from on-going projects was recognized in the last financial year and recently-awarded projects had yet to start.

Meanwhile, net profit surged 106.4% to US$52.8 million from US$25.6 million last year. This was due mainly to higher operating income and share of profit from associates and joint ventures.

Mr Francis Wong, Group Chief Executive Officer and President of Swiber, said, “We are pleased to see that the subsidiaries that we’ve nurtured; and relationships with associates and joint ventures that we’ve built-up over the years, have come to fruition. Operationally, with further integration of our business, more recently, the expansion of our yard operations, we are now on an even stronger footing than before. We will seek out synergistic opportunities to expand our business further.”

The orderbook at Swiber currently stands at US$650 million. A significant portion of projects will commence in the fourth quarter of this year.

The firm is currently trading at four times its historical earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.