OKP sees 7-fold jump in profit to $4.1m in H1

BT News Published July 28, 2007

OKP Holdings yesterday reported a near seven-fold increase in its net profit from $609,000 to $4.1 million for the six months ended June 30. The half-year net profit is already higher than the $4 million it achieved for the whole of FY2006.

Its turnover for H1 2007 rose 46.8 per cent to $49.1 million. OKP said the increase is mainly attributable to income generated from its civil and building segment which recorded a 72.1 per cent rise, coupled with recurring revenue from the road maintenance segment.


Offically Announcement

OKP Holdings posts net profit of S$4.1m in first half of 2007

Group benefits from booming oil and gas sector and is building up capabilities to grow its presence further, says Group Managing Director Or Toh Wat

SINGAPORE 27 July 2007 – SESDAQ-LISTED OKP Holdings Limited (“OKP”) today announced a net profit after tax and minority interest of S$4.1 million in its first half ended 30 June 2007, a whopping 572.4% increase from the same period in the previous year. More significantly, its six-month profit is higher than the S$4 million net profit the Group achieved for the whole of Financial Year 2006.

Group turnover for the first six months of 2007 was S$49.1 million, up 46.8% from the S$33.4 million it recorded in the previous corresponding period. Contributing significantly to the increase is the income generated from the civil & building construction segment, which recorded a 72.1% rise, coupled with recurring revenue from the road maintenance segment.

Earnings per share stood at 2.76 cents compared to 0.44 cents previously, an increase of 527.3%. The Group also registered a stronger gross profit margin of 19.8% and net profit margin of 8.4% compared to 8.4% and 1.8% respectively in the previous corresponding period. The improved gross profit margin is a result of better profits from civil engineering projects, good cost management and improved efficiency.

OKP is a leading home-grown infrastructure and civil engineering company in the region, specialising in the construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads. In the past two years, the company has had a presence in the oil and gas sector, providing civil construction work for petrochemical plants and oil storage terminals.

Group Managing Director Mr Or Toh Wat said the Group’s growing presence in a buoyant oil and gas sector had contributed significantly to its splendid showing. “I am delighted. At the same time, we have raised the bar for ourselves and I am acutely aware of the need to work much harder to take the Group to a higher level of performance,” he said.

Mr Or added that the Group continually builds on its core capabilities of civil engineering. “We do not veer from our original calling. We are a civil engineering firm, and while we take advantage of the currently booming Oil and Gas sector to grow our presence there, we also continue to prospect opportunities in other areas.”

For example, the Group continues to participate actively in government tenders for road maintenance works and is also actively exploring business opportunities overseas for airport-related projects. The Group’s order book to date stands at S$[209.0] million.

Strong financials and positive outlook

The Group’s financials appear strong. Its assets totalled S$61.24 million and net tangible assets stood at S$25.58 million. This works out to 17.07cents cents per share, compared with 12.81 cents per share as at 30 June 2006, an increase of 33.26%. Net working capital remained strong at S$17.31 million, compared to S$10.9 million it recorded as at 30 June 2006, an increase of 58.81%. OKP also generated a healthy operating cash flow of S$3.68 million, with cash and cash
equivalents of S$16.96 million. The Group’s market capitalisation stood at S$141 million, based on the closing price of S$0.94 as at 27 July 2007.

OKP’s Mr Or said he expected the outlook for the domestic oil and gas sector to remain robust for the next five years. The sector had been a strong catalyst for the Group’s growth in the last two years and with its recent S$40 million win from Foster Wheeler Asia Pacific Pte Ltd and WorleyParsons Pte Ltd for a Jurong Island project, the Group is confident that it will continue to benefit from the intensive activity there. "We believe that we are well-positioned to benefit from the current building boom there and will continue to build up our capabilities and track record with a mind to securing more deals in this sector,” said Mr Or.

He added that the Group’s 55-45% joint venture with Rotary Engineering Limited, OKP (Oil & Gas) Infrastructure Pte Ltd (“OKPOG”), has secured two contracts totalling S$6 million to date. OKPOG was formed to undertake civil engineering projects in the local Oil and Gas Sector. “We are optimistic that this joint venture will continue to generate new business opportunities for our Group and grow our presence further in the oil and gas sector here,” said Mr Or.

“Outside the oil and gas sector, we continue to leverage on our strength and expertise in tendering for government and other private projects,” he added. To date, the Group has secured three new contracts from the Public Utilities Board and one from the Jurong Town Corporation, with a combined contract value of approximately $30.4 million.

Going forward, OKP will continue to focus on a three-pronged strategy to grow its business, namely:

• Staying focused on core competencies: civil engineering projects will continue to feature prominently as this is OKP’s area of expertise where it has built up a distinctive track record over the years.

• Growing its presence in Oil and Gas: To spread risk, OKP will actively grow its niche in the expanding Oil and Gas Sector in order to grow its earnings base, and to ensure that it does not become overly-dependent on a single revenue source. In this regard, the Group has recently formed a 55-45% joint venture with Rotary Engineering Limited to undertake civil engineering projects in the local Oil and Gas Sector.

• Exploring overseas opportunities: While keeping a firm grip on the local market, it will also continually look for opportunities to grow its business overseas.

About OKP Holdings Limited (www.okph.com)
OKP Holdings Limited is a leading home-grown infrastructure and civil engineering company
in the region, specialising in the construction of airport runways and taxiways, expressways,
flyovers, vehicular bridges, urban and arterial roads. It was listed on the Singapore Exchange of Singapore Dealing and Automated Quotation System (“SESDAQ”) on 26 July 2002.

Established in 1966 by Founder and Chairman, Or Kim Peow, OKP has two core business
segments, Civil & Building Construction and Road Maintenance. The Group tenders for both
public and private civil engineering and infrastructure construction projects, which involve
the construction of urban and arterial roads, expressways, vehicular bridges, flyovers, airport
infrastructure and oil & gas related infrastructure for petrochemical plants and oil storage
terminals as well as the maintenance of roads and roads related facilities and building
construction-related works.

The Group has seven subsidiaries namely Or Kim Peow Contractors (Private) Limited, Eng
Lam Contractors Co (Pte) Ltd, OKP (Oil & Gas) Infrastructure Pte Ltd, OKP Technical
Management Pte Ltd, OKP Investments (China) Pte Ltd, United Pavement Specialists Pte
Ltd and OKP (CNMI) Corporation in Saipan, the Commonwealth of Northern Mariana
Islands.

OKP’s clientele includes Foster Wheeler and WorleyParsons, the Land Transport Authority,
the Housing Development Board, the Jurong Town Corporation, the Defence Science and
Technology Agency, the Civil Aviation Authority of Singapore, the Public Utilities Board, the
National Parks Board, Far East Organisation, Universal Terminal (S) Pte Ltd and Rotary
Engineering Limited.