Oiltek International has reported earnings of RM9.7 million for FY2021 ended Dec 31 2021, down 19.5%, as the newly-listed company booked one-off costs from its IPO.

 

Without which, the company&rsquo s net profit would have been RM12.2 million, up just 1.3%, even though revenue for the year was up 15% to RM100.6 million.

 

The company, which listed in early March, suffered from significantly lower gross profit margin of 23.4%, down 8.2 percentage points. Oiltek explains the better margins secured in the preceding FY2020 was because of higher margins for its projects secured in Africa.

 

Oiltek helps build plants and facilities for refiners, including that of edible oil. It was spun off for its separate listing from Koh Brothers Eco Engineering.

 

Oiltek&rsquo s CEO Henry Yong Khai Weng describes FY2021 as a &ldquo challenging&rdquo year because of the fallout from the pandemic and also because the company &ldquo had to incur one-off listing expenses.&rdquo

 

&ldquo Nevertheless, we still managed to deliver a positive result with our resilient business model and strong management,&rdquo he adds.

 

The company says it has a &ldquo strong&rdquo pipeline of projects with some RM49.2 million in new contracts won year to date, bringing the total orderbook to RM198.1 million.

 

Going forward, Oiltek sees the recent hike in world commodity prices of both vegetable oil and fossil fuel as a &ldquo strong catalyst&rdquo for &ldquo further positive developments&rdquo , as the industry will have bigger budgets to fund expansion.

OILTEK International : HQU -2.22%' s subsidiary in Malaysia has secured new contracts amounting to some RM49.2 million (S$15.8 million) to date for its current fiscal year ending Dec 31, 2022.

 

In its announcement on Monday (Apr 4), the Catalist-listed company said its most recent contract win entails the design, fabrication, supply and commissioning of a crude palm kernel oil refinery plant and a lauric refinery plant with ice condensing vacuum systems in Indonesia.

 

The refinery plants will each have a capacity of 1,500 metric tonnes per day and 600 metric tonnes per day, respectively, upon completion.

 

While the value of the contract was undisclosed, the group said its order book has now reached a " new historical high" of about RM198.1 million.

 

The total order book is expected to be fulfilled over the next 18 to 24 months and includes a new 1,000 metric tonnes per day physical refinery plant in Malaysia, as well as a dry fractionation plant in Africa.

 

" Indonesia, as the world' s leading producer of palm oil, is an important market for us and we intend to continue to grow our footprint there," said Henry Yong, executive director and chief executive of the group, of the latest contract win.

 

" We aim to maintain our growth momentum with the continued acquisition of projects in both the edible and non-edible oil refinery and renewable energy segments so as to build up our order book," he added.

Oiltek International rose as much as 23.9 per cent above its initial public offering (IPO) price of 23 cents per share as it made its trading debut on the Singapore Exchange' s Catalist board on Thursday (March 3).

 

The counter traded as high as 28.5 cents in the first 10 minutes before losing some steam, inching down to 25.5 cents by 9.21am.

 

Some 17 million shares have changed hands as at 9.38am, making it the fifth most active counter on the bourse.

 

Last month, Oiltek announced that it will be spun off from Catalist-listed engineering services company Koh Brothers Eco Engineering (KBEE Group) following its listing, although KBEE Group was still expected to retain 67.4 per cent interest in the company.

 

Oiltek, a solutions provider in the oils and fats industry, said the IPO was expected to raise gross proceeds of $5.2 million and net proceeds of $3.6 million, excluding estimated listing expenses.

 

Of the net proceeds, 72.5 per cent are earmarked for working capital to expand Oiltek' s business operations through securing more projects and projects of a larger scale. The rest will go towards the expansion of its business through investments, mergers and acquisitions, joint ventures and strategic alliances.

 

Oiltek currently does not have a dividend policy, but the board intends to recommend and distribute dividends of not less than 40 per cent of its net profit attributable to shareholders of the company for financial years 2022 and 2023. This is to reward shareholders for participating in Oiltek' s growth, it said.

Oiltek IPO sees strong investor interest at 4.3 times subscribed
 

INTEGRATED process and renewable energy solutions provider Oiltek International' s initial public offering (IPO) on the Catalist board was subscribed at 4.3 times for S$0.23 per share.

 

At the close of application at 12 pm on Mar 1, there were 767 applications for the 500,000 public tranche. The tranche was 112.9 times subscribed with applicants applying for an aggregate of 56.4 million public offer shares.

 

The 22 million placement shares were all subscribed, with interest received of about 39.3 million shares. The placement was about 1.8 times subscribed.

 

" The positive demand from both retail and institutional investors indicates a clear signal of investors' confidence in Oiltek' s business model and growth potential," said Henry Yong Khai Weng, executive director and chief executive officer, Oiltek.

 

Post-listing Oiltek will be spun off from Catalist-listed Koh Brothers Eco Engineering. Currently its order book stands at about RM173.1 million (S$56 million), with orders expected to be fulfilled over the next 18 months. Barring any unforeseen circumstances, Oiltek' s overall revenue should increase in line with the orderbook.

 

Oiltek currently does not have a dividend policy, but the board intends to recommend and distribute dividends of not less than 40 per cent of its net profit attributable to shareholders of the company for FY2022 and FY2023. This is to reward shareholders for participating in Oiltek' s growth.

 

" This is the beginning of our new corporate journey. With an acceleration of global trends shifting towards sustainability, we are incredibly excited about the opportunity to create value for all stakeholders by capitalising on the rising growth of the renewable energy sector," said Yong.

 

The listing and trading of Oiltek shares will commence at 9 am on Mar 3.