A Close Look At The Financials Of 3 Small Oil & Gas Companies

One of the biggest stories in Singapore’s stock market that surfaced last week would be the collapse of Swiber Holdings Limited (SGX: BGK).

The company had made a filing last Thursday to liquidate its business. But after having held talks with a major financial creditor, Swiber had decided to backtrack on the liquidation and placed itself under judicial management instead.

Swiber’s decision to close its business down caught many by surprise. But, it’s not a secret that the company has suffered as a result of the plunge in oil prices that started in 2014. As an example, the company’s profit of US$62 million in 2013 had become just US$16.4 million in 2014 and a negative US$27 million in 2015.

Swiber’s experience got me interested in taking a closer look at the businesses of small oil & gas companies in Singapore that have a market capitalisation of less than S$150 million.

There are a number of firms that meet the criteria and three randomly chosen ones are Nam Cheong Ltd (SGX: N4E), AusGroup Ltd (SGX: 5GJ), and Ezra Holdings Limited (SGX: 5DN). The table below shows how their debt-to-equity ratios, level of cash on hand, and profits have changed over the last 12 months:

Nam Cheong, AusGroup, and Ezra's business table
Source: S&P Global Market Intelligence

As the table shows, the trio have seen their level of cash and profits dwindle. Their balance sheets have also weakened given their higher debt-to-equity ratios.

Given such business performances, it is perhaps no real surprise to find that Nam Cheong, AusGroup, and Ezra have all seen their stock prices decline by 67% or more since the start of 2016.

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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 Ong Kai Kiat doesn't own shares in any companies mentioned.