Ramunia expects revenue to double
The Sun (Business News)
2 February 2007

Ramunia Holdings Bhd, which has an order book of RM1.2 billion, expects its revenue to at least double for the financial year ending Oct 31, 2007 (FY07), in anticipation of more local and overseas jobs.

The oil and gas infrastructure fabricator is currently bidding for 20 local and overseas shallow-water projects worth a total of RM8.5 billion. It also plans to venture into high-margin deep-water jobs by 2008 following the expansion of its yard capacity.

Its director of finance Mohamad Reezal Siddiq said the company had submitted bids for 12 local projects worth a total of RM3.5 billion and eight overseas projects totalling RM5 billion.

"It is a vibrant and active market. The oil majors have been talking about exploration. We are very bullish on the market.

"It is going to be an exponential growth from FY06. (Revenue will) easily double, perhaps triple (from FY06's RM351.63 million)," he told FinancialDaily in an interview.

Mohamad Reezal said its order book had jumped by 36% to RM1.2 billion from RM885 million as at end-October. These projects, which include the latest RM308 million oil and gas services contract from Carigali-PTTEPI Operating Company Sdn Bhd announced on Jan 26, would keep the company busy over the next 18 months.

In anticipation of more jobs coming in, Mohamad Reezal said its yard capacity had been doubled after Ramunia acquired a 32.4ha yard from its parent company Ramunia Energy & Marine Corporation Sdn Bhd (Remcorp) for RM108 million last month.

Prior to that, Remcorp leased the yard to Sime Engineering Services Bhd for over 10 years.

Mohamad Reezal said the size of its three contiguous yards in Johor now totals 68.8ha, the single biggest site in Asia.

He said it had allocated a total of RM200 million to upgrade and modernise the yards, in order to prepare the company for venturing into deep-water fabrication works, which require bigger and more complex infrastructure.

He said the upgrading of yards was scheduled to be fully completed by June 2008, after which it would start bidding for higher-margin deep-water projects.

The company is looking at increasing its operating margin from 10% in FY06 to 12% for FY08 when it ventures into deep-water fabrication works.

On the local jobs it is bidding for, he expects to secure jobs with a total contract value of 25% to 30% or some RM1 billion within a year. He is confident of clinching at least one job by next month.

Ramunia International Services Ltd business development general manager Rizal Abdul Samad said the company was also in active talks with four companies in India, Saudi Arabia, Qatar and Singapore.

Overseas projects contributed 15% to the group's revenue in FY06, Mohamad Reezal said, adding that it expected this to increase to 25% in FY07, with more jobs coming on stream. Ramunia International Services is wholly owned by Ramunia.

In FY06, Ramunia posted a net profit of RM17.66 million compared with a net loss of RM27.1 million a year earlier. Revenue almost doubled to RM351.63 million from RM183.17 million previously.