PEC Ltd. Annual Report FY2024: Navigating Change and Growth

Key Facts from the Reports:

1. Financial Performance for FY2024:
   • Revenue: PEC Ltd. reported a 14% increase in revenue, reaching S$491.0 million for the financial year ended 30 June 2024, up from S$430.9 million in FY2023.
   • Net Profit: The company achieved a net profit of S$18.7 million, more than double the previous year’s net profit of S$8.1 million.
   • Cash Flow: PEC generated significant cash from operations, with S$42.1 million, a strong recovery from the minimal S$0.2 million in FY2023.
   • Dividends: The company has proposed a final dividend of 2.0 cents per ordinary share and a special dividend of 1.5 cents per ordinary share for FY2024, subject to approval at the AGM on 25 October 2024.
2. Key Strategic Initiatives:
   • PEC continues to expand its footprint in Asia and the Middle East. A new engineering and fabrication facility in Abu Dhabi, UAE, was commissioned in July 2024 to support growing opportunities in the region.
   • The company is increasing its involvement in clean energy sectors, particularly modular projects for floating production storage and offloading (FPSO) vessels, aligning with global energy transition trends.
   • PEC is focusing on digital transformation, enhancing productivity and data integration through its Turnaround Management System.
3. Geographical and Sector Expansion:
   • PEC is rooted in Asia and is significantly expanding in the Middle East, including a new fabrication facility in Abu Dhabi.
   • The company’s presence in adjacent industries, including clean energy, is expected to grow as part of the long-term strategy.
4. Special Activities and Actions to Improve Profitability:
   • The commissioning of the new Abu Dhabi facility is expected to enhance capacity and improve operational efficiency.
   • PEC is actively pursuing the modular business for FPSO vessels, anticipating increased demand in this sector as global energy needs evolve.
5. Date of the Report and Financial Year:
   • The report is dated 10 October 2024, covering the financial year ending 30 June 2024.

Recommendations for Investors:

• For Current Shareholders:
  • With strong financial growth, expanding geographical reach, and a clear strategy to capitalize on new energy trends, investors currently holding PEC Ltd. shares should consider holding the stock, especially with the proposed dividend and special payout providing additional value.
• For Potential Investors:
  • For those not currently holding the stock, PEC Ltd. represents a strong investment opportunity, particularly due to its growth in clean energy and modular projects, which align with global energy transitions. Additionally, the company’s financial stability, operational expansion, and dividend potential make it an attractive buy.

Dividend Information:

• Final Dividend: 2.0 cents per ordinary share.
• Special Dividend: 1.5 cents per ordinary share.
• The dividends will be paid in November 2024, subject to shareholder approval on 25 October 2024.

Disclaimer:

• The above recommendations are based on the analysis of PEC Ltd.’s financial report and should not be considered financial advice. Investors should consult with their financial advisor before making any investment decisions.