After some 20 months, Nordic Group MR7 has started buying back shares on the open market again. On Jan 3, the provider of engineering and maintenance services bought back 31,500 shares at between 36 cents and 36.5 cents each. From Singapore Exchange S68 filings, the last time Nordic Group bought back shares was on May 30, 2022, when it acquired 231,200 shares at 42.5 cents each.
In its most recent business update for its 9MFY2023 ended Sept 2023, Nordic Group reported earnings of $13.6 million, down 18% y-o-y, even though revenue was up 8% y-o-y to $128.8 million as at end September 2023. Net asset value (NAV) stood at 29.8 cents per share, up 12%.
In 3Q2023, Nordic won contracts worth $36.6 million, bringing its order book to $187.9 million as at Sept 30, 2023. Nordic Group, led by executive chairman Chang Yeh Hong, has been steadily acquiring related businesses in a bid to accelerate growth.
The most recent was completed on Dec 22, 2023, with Nordic paying $5 million for Avon Industries, which is in the business of designing and building fuel dispensing systems in commercial and military airports.
Acquisitions made by Nordic in recent years included Multiheight in 2011, Austin Energy in 2015, Ensure Engineering in 2017, Envipure in 2019 and Starburst and Eratech in 2022.
The acquisition of Avon Industries allows Nordic to extend its suite of operation and maintenance services to government agencies. The deal will also help bring about synergies as Nordic’s existing products and services such as electrical and instrumentation services as well as fabrication, scaffolding and insulation services, can support Avon’s business.
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Meanwhile, Nordic can also help cross-sell Avon’s products and services to its existing customers, including those in the process industry.
PEC buybacks
Engineering firm PEC IX2 is maintaining its active, long-running share buyback programme. The most recent was on Jan 9 when the company acquired 30,800 shares each at 55 cents. This brings the total number of shares bought back under the current mandate to 528,100 shares, equivalent to 0.2081% of PEC’s total share base.
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PEC was established in 1982 and has over the years built up a business providing project works, maintenance and related services for the oil and gas, petrochemical and pharmaceutical industries in Asia and the Middle East.
In the most recent 2HFY2023 ended June 2023, PEC recorded a revenue of $234 million, up 3% y-o-y. However, earnings in the same period were down 57% y-o-y from $9.15 million to $3.9 million. This brings PEC’s full-year earnings to $6.8 million, down 52% y-o-y from $14.1 million. Revenue in the same period held steady at around $431 million.
In its earnings commentary dated Aug 29, 2023, PEC attributes the lower earnings to higher costs of sales, specifically because of variation works for certain projects where the variation claims remain outstanding. In line with the lower earnings, a final dividend of 2 cents per share was declared, versus 3.5 cents paid for in the preceding FY2022.
PEC warns of operating challenges that persist amid ongoing macroeconomic headwinds, rising costs and a tight labour market. However, despite the challenges, PEC says it is going ahead to enhance its capabilities and expand its capacity with the construction of a new fabrication yard in Abu Dhabi to support clients not only in the process sector but also the modular compressions systems and renewable energy sector in the Middle East and around the region.
As at June 30, 2023, PEC’s order book stood at $191.3 million, excluding maintenance contracts. As at June 30, 2023, PEC’s NAV per share was 92 cents, down slightly from 94.9 cents as at June 30, 2022.
