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Joelton
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13-Apr-2020 13:16
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https://www.businesstimes.com.sg/government-economy/esg-stb-tell-30-businesses-to-stop-operationsBH Global' s diversification efforts paying off
They helped the company to report a net profit of S$1.7 million for FY2019, its first profit since FY2013. AS the shipping industry adopts new measures to clean up its environmentally harmful practices, local offshore and marine group BH Global Corporation is reaping the fruits of its efforts to diversify into new areas including sustainability. For FY2019 ended December, the company reported a 22 per cent increase in revenue to S$49.4 million. The higher revenue, in combination with tightly controlled costs and fewer provisions and impairments, allowed it to report a net profit of S$1.7 million. This is BH Global' s first profit since FY2013. The 57-year-old company has operated as an electrical and technical equipment supplier to the offshore and marine industry for most of its history, but was spurred to broaden its scope following severe downturns such as the 2008 shipbuilding crisis and 2015 oil crisis. Its other businesses now include environmentally friendly LED lighting, infrared thermal sensing technology, cybersecurity, retrofitting vessels with glass-reinforced epoxy (GRE) pipes and designing a plug-in hybrid electric propulsion system for fast-launch vessels. " Marine is a very polluted and very old industry. It doesn' t adopt a lot of new, green initiatives, so it has been under a lot of pressure (to do better)," said Vincent Lim, chief executive of the Singapore Exchange (SGX) mainboard-listed group. With the International Maritime Organisation' s new requirement in 2018 for all vessels to use fuel with a sulphur content of no more than 0.5 per cent by 2020, the industry is moving in the right direction at last. BH Global is ready to do its part. " We have set our direction towards electrification, environmental and digitalisation, because we are looking at something very long-haul and sustainable," Mr Lim said. The GRE pipes that BH Global supplies and retrofits have been in high demand as shipowners comply with the new requirements. One approved method for compliance involves modifying engine systems to reduce emissions to a level that is similar to using fuel with a lower sulphur content. This can be accomplished by installing exhaust gas cleaning " scrubber" systems, which require corrosion-resistant GRE pipes rather than traditional carbon steel ones. " You might think that Singapore is a very small market, but we have more than 2,000 small vessels in Singapore waters. Every day, we are producing 6,000 tonnes of greenhouse gases," Mr Lim said. Singapore also receives ships from all over the world, and BH Global has been servicing many vessels turned away from Chinese ports in recent months. Going electric BH Global' s next big project is the hybrid electric propulsion system, which Mr Lim says will be the first of its kind in Singapore. He envisions a day when Singapore' s ferry terminals will not smell of exhaust fumes, as the hybrid system would allow for ships to run on batteries when the vessels are idling at port terminals. In February, BH Global signed a memorandum of understanding with four industry players to jointly develop the plug-in hybrid electric propulsion fast launch vessel. One of those partners is Penguin Shipyard International, an aluminium boat builder that is listed on the SGX' s mainboard. BH Global also set up a test lab to develop, test and certify the hybrid propulsion system. Said chief operating officer Patrick Lim, who is also Mr Lim' s younger brother: " We are working closely with certification agency Bureau Veritas Marine (Singapore) to jointly review, develop and endorse the test facilities and procedures, and eventually certify the system when it is completed, with factory acceptance test at our test lab and sea trials with Penguin Shipyard." The vessel equipped with the hybrid system is targeted to launch soon, with a sea trial anticipated for June 2020. New ventures, customers BH Global' s diversification has drawn new customers. Solutions from its green LED lighting division are not just used by companies seeking to be compliant with stringent marine and offshore standards, but have also been used by lighting industry leaders Philips and Osram in projects such as the Canton Tower in Guangzhou and the Shanghai Tower. To continue growing the business, BH Global is developing smart control and monitoring systems to serve factories looking to reduce their energy usage. BH Global' s diversification has extended into the fields of cybersecurity and infrared thermal sensing technology, through its majority-owned subsidiaries Athena Dynamics and Omnisense Systems. Athena counts government agencies among the clients using its solutions for critical infrastructure protection and business systems security. Omnisense is known for its fever screening systems, which have been in high demand during the current novel coronavirus pandemic. It has also developed night vision surveillance systems used by private yacht owners, commercial ship owners and law enforcement. It set up an office in Florida earlier this year, which will enable it to serve the US market directly. One of the group' s biggest challenges is maintaining a healthy cash flow, since it works with most of its customers on credit terms. For FY2019, BH Global reported positive cash flow of S$939,000 from operating activities - a reversal from a negative cash flow of S$1.1 million in FY2018. The company did not record any net provisions for FY2019. It did, however, record a sharp jump in receivables - to S$4.3 million from S$189,000 - as well as a significant increase in payables - to S$8.8 million from negative S$657,000. The elder Mr Lim said that despite diversifying into more fields, BH Global is still viewed primarily as an offshore and marine player. This poses difficulties when it tries to obtain financing from banks. " They are very stringent on credit control for those in marine and offshore, because I think they were burned (in the past) and suffered huge losses," he said. " It can' t be helped, so we have to use our funding wisely." He added that the group is open to bringing in strategic investors, which would provide additional funding to help the group move faster in its new businesses. Another challenge lies in employing sufficient talent, as local engineers are in short supply. To overcome this, the group has set up research and development (R& D) teams overseas, such as in Taiwan, where manpower is more plentiful and affordable. It maintains smaller R& D teams in Singapore that focus more on testing and calibrating the products. For now, the original electrical and technical supply business still brings in the majority of BH Global' s revenue. In FY2019, supply chain management accounted for 79 per cent of revenue. Security and engineering accounted for 8 per cent and 13 per cent, respectively. Mr Lim hopes to see the other businesses overtake the supply arm in terms of percentage contribution in the next two to three years, even as the supply chain business continues to grow. The group is confident that its overall revenue will continue the upward trend shown over the past three years despite recent events impacting the global economy. Mr Lim noted that the virus outbreak and US-China trade tensions have negatively affected the LED lighting arm, but they have boosted business for the thermal scanner and GRE pipe retrofitting divisions. Possible spin-offs BH Global does not rule out spinning off some of its subsidiaries through public listings or buyouts in future. Mr Lim said the group would like to use some of the funds raised from such a spin-off to invest in local small and mid-sized enterprises (SMEs) that have promising ideas or products but hesitate to apply for government funding for a number of reasons. These might include the red tape that could delay their time to market and concerns over intellectual property security. " I strongly suggest that another channel should be set up to look at these SMEs and their business prospects, to give them some funding first and do the evaluation along the way," he said, adding that the initial amount could be small - perhaps 10 to 20 per cent of the project costs - and increased later on if the company delivers on its promises. " If there is no such channel created by the government, we are willing to take it up, because we want to support local startups and enterprises." Shares of BH Global last traded at eight cents on March 13. The company has a market capitalisation of S$24 million. It is currently on the SGX' s watch-list of companies that have recorded pre-tax losses for three consecutive years, have a market capitalisation of less than S$40 million and have a trading price of less than 20 cents. |
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granto
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21-Aug-2014 16:16
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BH Global offloads Z-Power: http://www.seashipnews.com/News/BH-Global-offloads-Z-Power/3w3c2550.html |
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kingkongdong
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17-Oct-2012 10:06
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Just have a look at all those questionable assets they acquired recently. It's like they when on asset acquisition binge right after TDR. I am surprise SGX never questioned them on any of those aquisitions. I am guessing coz they are corporate governance award winners for so many years running, plus they have outsourced to third party internal auditor, whose MD just happens to be the ex-chief of internal Auditor for the Singapore Exchange, plus the size of individual acquisitions although multiple and significant together, all perhaps help them fall under SGX radar screens? Seriously, They better keep an eye on this company. And please don't expect to rely on their independent directors, I have serious reservations on at least one of them. Also have a look at inventory in 2nd quarter, they even loading this dispite the marine sector being in doldrums. Tax expense allocation? Those numbers for real? Can we rely on their unaudited numbers? Especially after the 2 page fisco on 4th quarter? Come on, who in their right mind does that on 4th Quarter, knowing full well it is gonna get audited? Looking at their balance sheet, I can't help but think that BH is going to self implode soon. Perhaps one round of diluation before delisting? At best rights issue, worst, share placement to certain " third parties" . oh well.... |
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kingkongdong
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17-Oct-2012 08:40
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After all that digging, there is one thing I realise. There's a high possibility BH Global might be going to delist soon. |
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3110029
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13-Oct-2012 13:12
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No thanks are needed, I was glad to do it.
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kingkongdong
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12-Oct-2012 19:32
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Your right! Thanks for clarifying it for me. Forgot about the dividend. I m the kind of lazy ass that stops after the first few pages of the report. Thanks again |
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3110029
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12-Oct-2012 19:17
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Hi, Net profit for the period 5,001 Less dividend 3,360 Less Additional investment in subsidiaries 287 You may get this from page 7 of the report....look for accumulated profits column.
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kingkongdong
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12-Oct-2012 18:50
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Thank you for taking the time to do this. Yes, the numbers look right. Taken from pg4 of their 2 Quarter results. But why is the growth in accumulated profits for the period so low at $1.354m (70.898m - 69.544m) with reference to pg 2 of this report, shouldn't it be $3.893m (after less non-controlling interest)? Now I m confused?
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3110029
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12-Oct-2012 18:22
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Hi, I m not guru. As your question attract my attention so I try to find out..... Here's my working which based on the financial statement in SGX @ 31.07.2012 and some extract from internet. Kindly correct me, if i m wrong. Thank you. http://i48.tinypic.com/2j349bs.jpg |
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kingkongdong
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12-Oct-2012 17:35
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For the first 2 quarters (1st half) they reported: Net comprehensive income: $3.89m Less Exchange differences on translation of the financial statements of foreign entities (net): $2.14m Less Non-controlling interest: $1.21m They shld still ve a tiny profit of $0.54m for half yr. So I don't get it how NAV can fall from 25 cents to 23cents? Thanks for the help. I think i m seriously damn dong. need to hit the books more and brush up on my accounting. |
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kingkongdong
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12-Oct-2012 16:48
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Hi, Thank you for the reply. Truly Appriciate it. I do know what translation reserves are. But the profits in 1st and 2nd quarter I was referring to, already accounted for translation reserves. Yet they saw NAV fall 2 cents. |
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3110029
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12-Oct-2012 11:31
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Hi, This is mainly due to Translation reserves under Shareholders' equity in the company's balance sheet. You may google search " translation reserves" if you want to know how its work.
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kingkongdong
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11-Oct-2012 16:45
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I guess there's not one out there capable or willing to help me solve the mystery of the disappearing NTA.... 2 cent in NAV can't just go poof?? can it? At 480m shares outstanding, that works to approximately $9.6m. For a tiny company like this, that's pretty material in my opinion. Looks like they are up to something.... oh well.
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kingkongdong
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05-Oct-2012 14:45
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so can anyone help me out? Really need help to understand here. Thanks in advance | ||||
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kingkongdong
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05-Oct-2012 11:39
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Sorry, I such a dong. But I don't understand? How can liabilites affect NAV? Wouldn't it appear on asset side as well? I am looking at their total comprehensive income for the period. It should have taken into account even things like translation lost. It shows a profit. Sorry for asking, but could you help me elaborate? |
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BellaVida
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05-Oct-2012 11:28
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due to increase in liabilities? | ||||
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kingkongdong
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05-Oct-2012 11:02
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any guru can help me explain something in the accounts. Full yr 2011, they show NTA of 25cents per share. Mar 2012 (1st quarter) they report profit but NTA fall to 24cents. Jun 2012 (2nd quarter) they also report profit but NTA again fall to 23cents. During that period no new shares issued. 480m outstanding. I know this are unaudited accounts, but this looks strange to me. Can any accounts people help me understand this? |
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