Rotary may bag Neste, Stolt Nielsen projects

04 August 2008 09:25  [Source: ICIS news]

SINGAPORE (ICIS news)--Singapore based Rotary Engineering may clinch contracts from Neste Oil for its S$1.2bn ($876m) renewable diesel plant and from Stolt-Nielsen for its 56-hectare storage infrastructure project in Singapore, analysts said on Monday.

"We are hopeful of potential jobs from Neste Oil and Stolt-Nielsen as Singapore’s Economic Development Board disclosed their intentions to invest in storage infrastructure in Singapore," said OCBC investment research analyst Kelly Chia.

Additionally, Rotary was expected to benefit from the booming oil, gas and petrochemical related infrastructural development projects in the Middle East and from the ongoing expansion initiatives by Chinese oil companies, Chia added.

"We have good vibes on Rotary’s long term prospects despite pressures on costs as checks on both upstream and downstream indicate a consensus that most of the increased cost absorption will be on the engineering, procurement and construction (EPC) contractors rather than project owners," Chia said.

Rotary’s ability to meet the needs of the growing petrochemical and refinery business would enhance its earnings profile despite rising costs, she said.

The company’s new S$22m facility in Jubail, Saudi Arabia would help it meet the demands of the growing Middle Eastern markets.

OCBC investment research expected Rotary to earn a full year net profit of S$61m in a 2008 and a projected full year net profit of S$71m in 2009.

($1 = S$ 1.37)

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By: Bohan Loh
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