Miclyn Express confident of steady expansion

FOR a man whose company's ..." /> Miclyn Express confident of steady expansion

FOR a man whose company's ...">
From The Australian

Miclyn Express confident of steady expansion

FOR a man whose company's share price has dropped 22 per cent, Miclyn Express Offshore chief executive Diederik de Boer is sanguine.

"Our first profit result was pretty much in line with prospectus forecast," he said, adding that he had every confidence that the company's calendar 2010 result would also beat the original forecasts.

The ASX-listed but Singapore-based oil and gas service vessel operator's EBIT number of $US45.6 million ($51.4m) for the year to June 30 was 2 per cent above forecast even though the $US116.5m revenue number was 3 per cent below target.

Mr de Boer is a practical Dutchman for whom the March float was a successful debt-reduction exercise and who, while not thrilled to see a share price of $1.46 compared with a float price of $1.90, is quietly confident that the share price drop, now steadied, has been all about market sentiment and that his business will justify its mainly institutional investors' confidence in the medium to long term.

His model is simple enough. As CFO Nick Gleeson points out in an interview in the Miclyn office looking out at Sentosa Island, the idea is to pay out "between 20 and 40 per cent" of net profit in dividends and to invest most of the balance in new vessels, of which the company has 118 strung between the Persian Gulf and Australia, with another six under construction. They range from barges to accommodation vessels for more than 200 people, which the company tries, where possible, to build in its own yard on the Indonesian island of Batam, a 45-minute ferry ride south of Singapore.

"Our IRR (internal rate of return) target is mid to high teens," Mr Gleeson said, making it clear the company did not like gearing (the float brought it down from 536 per cent to 51 per cent and the net debt to EBITDA ratio from 5.2 times to a very manageable 2.1 times) and did not like risk. "We fund capex out of cashflow," he said.

So where's the upside? "The biggest growth potential is in Australia," said Mr de Boer without hesitation, seeing Chevron's giant Gorgon project as just the start of a gas boom off the WA and NT coasts that would run and run, starting of course with the construction phase but requiring regular vessel use for the life of the project. He sees it as "another Thailand" for his company, highlighting where Miclyn is getting most of its business at the moment. It has 35 vessels servicing established production fields about 200km off Songkla on the Thai east coast.

Miclyn is small beer in Australia at the moment, operating mostly via a 50-50 joint venture with the Samson group.

On April 8 Miclyn spent $US21m buying a half share in Samson Maritime Holdings, a well-established Fremantle-based operation.

But it is growing. On August 23, Miclyn announced a deal with the Dutch Schenker group to provide up to three tugs and four barges for a 10-month period to bring materials down from Indonesia to Barrow Island for the Gorgon development. That deal is particularly welcome because Miclyn's tug and barge operations have been one of its laggards.
From The Australian<br /> <br /> <span style="font-size: 14pt"><span style="font-weight: bold">Miclyn Express confident of steady expansion</span></span><br /> <br /> FOR a man whose company's share price has dropped 22 per cent, Miclyn Express Offshore chief executive Diederik de Boer is sanguine.<br /> <br /> &quot;Our first profit result was pretty much in line with prospectus forecast,&quot; he said, adding that he had every confidence that the company's calendar 2010 result would also beat the original forecasts.<br /> <br /> The ASX-listed but Singapore-based oil and gas service vessel operator's EBIT number of $US45.6 million ($51.4m) for the year to June 30 was 2 per cent above forecast even though the $US116.5m revenue number was 3 per cent below target.<br /> <br /> Mr de Boer is a practical Dutchman for whom the March float was a successful debt-reduction exercise and who, while not thrilled to see a share price of $1.46 compared with a float price of $1.90, is quietly confident that the share price drop, now steadied, has been all about market sentiment and that his business will justify its mainly institutional investors' confidence in the medium to long term.<br /> <br /> His model is simple enough. As CFO Nick Gleeson points out in an interview in the Miclyn office looking out at Sentosa Island, the idea is to pay out &quot;between 20 and 40 per cent&quot; of net profit in dividends and to invest most of the balance in new vessels, of which the company has 118 strung between the Persian Gulf and Australia, with another six under construction. They range from barges to accommodation vessels for more than 200 people, which the company tries, where possible, to build in its own yard on the Indonesian island of Batam, a 45-minute ferry ride south of Singapore.<br /> <br /> &quot;Our IRR (internal rate of return) target is mid to high teens,&quot; Mr Gleeson said, making it clear the company did not like gearing (the float brought it down from 536 per cent to 51 per cent and the net debt to EBITDA ratio from 5.2 times to a very manageable 2.1 times) and did not like risk. &quot;We fund capex out of cashflow,&quot; he said.<br /> <br /> So where's the upside? &quot;The biggest growth potential is in Australia,&quot; said Mr de Boer without hesitation, seeing Chevron's giant Gorgon project as just the start of a gas boom off the WA and NT coasts that would run and run, starting of course with the construction phase but requiring regular vessel use for the life of the project. He sees it as &quot;another Thailand&quot; for his company, highlighting where Miclyn is getting most of its business at the moment. It has 35 vessels servicing established production fields about 200km off Songkla on the Thai east coast.<br /> <br /> Miclyn is small beer in Australia at the moment, operating mostly via a 50-50 joint venture with the Samson group.<br /> <br /> On April 8 Miclyn spent $US21m buying a half share in Samson Maritime Holdings, a well-established Fremantle-based operation.<br /> <br /> But it is growing. On August 23, Miclyn announced a deal with the Dutch Schenker group to provide up to three tugs and four barges for a 10-month period to bring materials down from Indonesia to Barrow Island for the Gorgon development. That deal is particularly welcome because Miclyn's tug and barge operations have been one of its laggards.<br />
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