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Where to Next for This Beaten Down Oil and Gas Company?

Over the past six months or so, share prices of MTQ Corporation Limited (SGX: M05) has taken a quite shelling — falling near to its 52-week low as of yesterday (15 December 2014).

MTQ is an oil and gas equipment and services company that has operations in Singapore, Australia, United Kingdom, and Bahrain. The S$175 million market cap company is involved in oilfield engineering, engine systems, and subsea marine services.

Previously, I covered the company’s revenue and EBITDA growth here. Today, we will look at the geographical spread of its revenue.

A closer look at geographical revenue

MTQ - 1

Source: Company Earnings Report

Over the past five plus years, MTQ has done well to increase its revenue from $82 million in the financial year ended 31 March 2010 (FY2010) to $313 million in FY2014. A large part of the company’s revenue growth came from its January 2012 acquisition of the Binder Group and its March 2013 acquisition of Neptune Marine Services. Binder Group is an Australian liquefied-natural-gas (LNG) pipe shoe supplier while Neptune Marine Services is a provider of subsea marine services.

From a geographical standpoint, Australia and the United Kingdom benefited the most from the above acquisitions; with the revenue in Australia almost tripling in two years. In fact — for FY2014 — revenue from Australia was the largest of the four regions, making up almost half of MTQ’s overall sales. Singapore came in second with 36% of revenue while the United Kingdom came it with a respectable $37.4 million for FY2014 or 11% of the topline.

Foolish summary

MTQ’s revenue has benefitted from its acquisitions in the past three years, arising from its steady free cash flow. In the second quarter ended on 31 September 2014, MTQ reported that its Bahrain operations has been profitable for the quarter. Moving forward, we should look towards MTQ further ramping up its Bahrain operations, and look for signs of long-term organic growth from its Neptune division. We should keep an eye out for profitable growth from its Neptune division as well.

I also wrote a short snippet on MTQ in my previous article which still holds true at this point of time:

Foolish readers may have heard of the oil price rout that is making its rounds worldwide. The drop in oil price may reduce capital expenditure spend and exploration activities, hence may have an impact to MTQ. That said, if MTQ is able to maintain its positive free cash-flow, it could weather the stormy waters ahead and come out stronger as a company. My fellow Fool Ser Jing lists MTQ as one of the stronger companies around in the oil and gas industry, measured by the net debt to equity ratio.

As of the closing price on yesterday (12 December 2014) of $1.03, MTQ traded at a trailing earnings ratio of about 7.5, and has a dividend yield of around 3.9%.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.