New contracts boost profits at Advanced Holdings

23 July 2007 11:18  [Source: ICIS news]

SINGAPORE (ICIS news)--Singapore-based process equipment maker Advanced Holdings on Monday posted a strong rise in its first-half operating profits after winning numerous contracts from the oil, gas and petrochemicals sectors.

 

The company’s first-half operating income rose to Singapore dollars (S$) 4.9m ($3.2m), from S$1.2m in the same period a year ago, while revenue tripled to S$31.0m, managing director Kar Wong said.

 

However, it had shelved a biodiesel project in Kuantan, Malaysia, on poor margins, he added.

 

In its main market China, the company more than tripled its overall sales to S$18.6m.

 

Contribution from the petrochemicals segment jumped to S$16.6m, from S$3.3 year on year, mainly due to new projects in China, and in the oil and gas division, sales more than doubled to S$12.4m, he added.

 

Advanced Holdings also planned to strengthen its position in two new markets, the Middle East and Vietnam, Wong said.

 

In the Middle East, where it did not have any income in the first six months of 2006, revenue reached S$6.8m in the same period this year, he said.

 

Sales in other countries, mainly Vietnam, more than doubled to S$3.5m, he added.

 

The company, which had planned to build a 100,000 tonne/year biodiesel plant in Kuantan and triple the capacity at a later stage, shelved the project three months ago despite having started on engineering design and winning approval, he said.

 

“Some Asian countries are deforesting in order to grow oil palms,” he said, adding that it was also difficult to sell biodiesel at a profit.

 

High crude palm oil prices have forced Asian biodiesel producers to either cut output or slow construction of new units.

 

“We’re not giving [up on biodiesel] because of a lot of work that we have done and a lot of knowledge that we have acquired. So we are still looking at other potential feedstocks,” Wong said, adding that the project could restart if feedstocks were available and the economics improved.

 

($1 = S$1.51)

By: Florence Tan
+65 6780 4359

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