Boustead Singapore (SIN:F9D)

The Straits Times  May 26  Comment 
May 27, 2015 1:20 AM BOUSTEAD Singapore yesterday reported a 30 per cent slump in fourth-quarter net profit to $17.9 million.
Mondo Visione  Apr 30  Comment 
Singapore Exchange (SGX) today welcomed Boustead Projects Limited to Mainboard, under the stock code, “AVM”.  Boustead Projects is the real estate business division of Mainboard-listed Boustead Singapore, an award-winning global...
The Straits Times  Dec 2  Comment 
December 03, 2014 1:13 AM BOUSTEAD Singapore is considering demerging its real estate solutions business from the rest of the group and spinning it off as a separate listed company.
The Straits Times  Nov 17  Comment 
November 18, 2014 1:24 AM A UNIT of Boustead Singapore has been awarded an A$16.5 million (S$18.6 million) contract from Australia's Defence Department.
The Straits Times  Oct 7  Comment 
October 08, 2014 1:43 AM ENGINEERING group Boustead Singapore has been awarded a contract worth more than $20 million to build the Airbus Asia Training Centre in Seletar Aerospace Park. This will bring the value of its order book to more than...
The Straits Times  May 26  Comment 
May 27, 2014 2:03 AM ENGINEERING and technology group Boustead Singapore yesterday said fourth-quarter net profit fell 8 per cent to $25.5 million.
The Straits Times  Mar 25  Comment 
March 26, 2014 7:16 PM Boustead Singapore's energy-related engineering division has won global contracts from oil and gas industries worth more than $50 million, it said on Wednesday.     
The Straits Times  Mar 25  Comment 
The Straits Times  Feb 13  Comment 
February 13, 2014 9:56 PM Engineering services provider Boustead Singapore's third-quarter net profit slumped by 30 per cent to $18.4 million on the back of an 8 per cent drop in revenue to $129.7 million.     
The Straits Times  Aug 13  Comment 
August 13, 2013 9:01 PM Boustead Singapore has registered a 45 per cent jump in first quarter net profit to $17.7 million.     


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Boustead Singapore Limited (SGX: F9D) specialises in infrastructure-related engineering services and geo-spatial technology. In FY2011, Boustead achieved record revenue of S$560.6 million and net profit of S$52.2 million. The group has four core business divisions: energy-related engineering, water & wastewater engineering, real estate solutions and geo-spatial technology.

Boustead has undertaken infrastructure projects in 79 countries globally to date. The company is incorporated in Singapore, and operates in six principal geographical areas – Asia Pacific, Australia, North and South America, Middle East, North Africa and Europe.

Demand for products from the energy-related engineering division, which caters to both the upstream and downstream industries, is dependent on global crude oil prices, as well as investments in oil & gas infrastructure. The division is likely to benefit from higher global crude oil prices at stable, sustainable levels. In addition, barriers to entry are high in the oil and gas industries, limiting the global competition to only a handful of companies with strong track records to bid for contracts.

The water & wastewater engineering division turned around in FY2010 and achieved profit-before-tax of S$7.8 million. Since the beginning of 2011, the water division has secured several small and medium-sized contracts in Indonesia, Singapore, Vietnam and the United Arab Emirates. The division aims to sustain a profitable position, with a gradual and steady recovery in its order book.

Approximately 95% of the projects secured by the industrial real estate solutions division are based in Singapore. The Singapore industrial property has been slow in recovering, unlike the market for commercial and residential properties. Despite a saturated market for industrial real estate, the division has managed to secure several sizeable contracts in niche industry sectors, including aviation, biomedical/healthcare and high-tech manufacturing.[1] [2]

Company Overview

Boustead Singapore Limited (SGX: F9D) is a global infrastructure-related engineering services and geo-spatial technology group listed on the Singapore Exchange. Headquartered in Singapore, the company’s core businesses are in the development of key infrastructure which supports economic growth in the public and private sectors of emerging markets.

The group’s engineering divisions specialise in energy-related engineering, water & wastewater engineering and real estate solutions. Boustead also has a geo-spatial technology arm which distributes Esri geo-spatial technology to major markets across Australia and South East Asia.

Key Business Drivers

Energy-Related Engineering (25% of FY2011 revenue)

  • Boustead International Heaters designs, engineers and supplies process heater systems and waste heat recovery units to the downstream oil & gas industries.
  • Boustead Controls & Electrics designs, engineers and supplies process control systems and emergency/safety shutdown systems to the upstream oil & gas industries, on well platforms, production platforms and FPSOs.
  • Boustead Maxitherm Energy designs, engineers and constructs solid waste energy recovery plants and mini-power plants.

Water & Wastewater Engineering (5% of FY2011 revenue)

  • Boustead Salcon Water Solutions designs, engineers and constructs water and wastewater treatment plants for industrial and municipal applications.

Real Estate Solutions (53% of FY2011 revenue)

  • Boustead Projects designs, builds and develops industrial facilities and industrial parks for multinational corporations in industries ranging from aviation, biomedical/healthcare, high-tech manufacturing to lifestyle and logistics, among others.

Geo-Spatial Technology (17% of FY2011 revenue)

  • Esri Australia and Esri South Asia are exclusive partners and distributors of Esri's geographic information systems and location intelligence solutions.

Financial Results


Boustead's revenue decreased 15% to S$438.4 million, while net profit attributable to owners of the company fell by 28% to S$43.1 million. These declines were attributed to the global financial crisis, impacting sales demand and business investments. Prior to FY2010, Boustead achieved seven years of record-breaking revenue and net profit from FY2003 – FY2009.

The company reported a healthy net cash position of S$199.3, with a CAGR of 19% over five financial years.

The Board proposed a final dividend of 2.5 cents per share and a special dividend of 1.5 cents per share, in addition to the interim dividend of 1.5 cents per share.

4Q FY2010

Boustead's 4Q results fell in line with analysts' expectations. While revenue from real estate solutions fell slightly, this was made up by the water and wastewater division which generated a higher turnover and profit before tax. The company had an attractive dividend yield of 7%, with strong operating cash flow and a healthy balance sheet.

Analysts expect further growth from securing of new orders and synergistic acquisitions in FY2011.

Key Trends and Forces

Demand for process heaters and process control systems depends on sustainable global crude oil prices

Process heater systems are key equipment in the oil refining process at downstream oil refineries, gas processing plants and petrochemical plants. With global oil prices fluctuating in a trading band between US$100 and US$120, there are unlikely to be many development plans for building mega refineries today. However, refineries with plans to alter their product mix or revamp their existing heaters would require new process heater systems to match the planned product mix or capacity changes and increase their efficiency to minimise operating costs.

At the upstream side, demand for process control systems in the oil & gas industries has declined due to the global economic downturn. If global crude oil prices return to more stable levels, the market might be able to recover gradually.

However, exceedingly high global crude oil prices will not translate into higher sales for the energy-related engineering division, because oil-importing countries will be severely impacted, having to spend more money to address energy needs.[3] Investment in developing countries will be stifled, affecting business and consumer confidence. Markets could likely turn to alternative energy resources like natural gas, triggering another increase in natural gas prices.

Other than the conventional crude oil market, Boustead is also involved in alternative energy developments including the liquefied natural gas and gas-to-liquids (GTL) markets. Current global crude oil reserves are dwindling, which suggests the growing significance of GTL technology to meet growing energy demand. Natural gas is difficult to transport over long distances, making GTL the next suitable product for the transport sector, especially since it is compatible with existing transport fleets.[4]

Business development in emerging markets

Middle East and North Africa present global opportunities in water and wastewater treatment, especially in desalination because these geographical regions face water scarcity. There is also a growing focus on wastewater management and water recycling, which can help to address agricultural needs, taking off some strain on existing fresh water resources.

Investments in infrastructure development projects are being taken up by developing countries including Vietnam and Indonesia at a fast pace, especially in power projects[5] to meet the population’s burgeoning needs for electricity.[6]

Early in 2010, Boustead’s water & wastewater engineering division was awarded a project to design, engineer and construct water and wastewater treatment plants for the Vung Ang Thermal Plant in Vietnam. [7]

Environmental Technologies

Another growing segment of the energy-related engineering business is the demand for waste heat recovery units. Waste heat from gas turbines can be recycled back into the heating process to maintain temperatures, enhancing the energy efficiency of the process and reducing fuel consumption needs. [8]

Oil refineries and power plants are facing increasing pressure to be more environmental-friendly, and waste heat recovery units present a viable green solution by cutting down thermal and air pollution through recycling hot flue gases.

Waste-to-energy facilities are being developed globally[9], especially when traditional energy resources are limited and land is not readily available for disposal of waste. [10] A cost-effective process would be to convert solid waste into energy, recovering resources and saving costs. The resulting electricity produced can be recycled back into industrial processes or used to power small communities with limited access to national grids.

The demand for Boustead’s solid waste energy recovery plants could potentially come from plantations which have a significant amount of agro-industrial waste, as well as countries facing a shortage of energy supply.


  1. " Boustead subsidiary awarded S$40mln contract from Cenco," Singapore Business Review, 1 April 2010
  2. "Boustead unit wins $12m to design, build cold chain logistics facility,", 5 August 2010
  3. "Analysis of the impact of high oil prices on the global economy" International Energy Agency, May 2004
  4. "GTL: A worthy competition" Industrial Fuels and Power, 1 Dec 2008
  5. "Vung Ang EZ, destination for investors" Vietnam Development Gateway
  6. "Indonesia’s hotbed of power" Industrial Fuels and Power, 16 April 2010
  7. "Boustead subsidiary awarded S$11m in water and wastewater projects from power industry" Boustead Singapore Limited Investor Centre, 1 Feb 2010
  8. "Tapping Industrial Waste Heat Could Reduce Fossil Fuel Demands" Science Daily, 4 Apr 2009
  9. "Waste to Energy Considered on a Large Scale in Dubai" Science Daily, 1 Oct 2010
  10. "Keppel officially opens Singapore’s newest Waste-to-Energy plant" Keppel Corporation Press Release, 30 June 2010
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