Analabs' aquaculture revenue to exceed RM 10 million by 2010

Analabs Resources Bhd, the market leader in the toxic waste recycling industry, expects revenue from its aquaculture business to breach the RM10 million (US$2.86 million) mark within two years from RM4.58 million (US$1.3 million) currently, said its chairman Kan Yow Kheong. 

 

Barring unforeseen circumstances, the group aims to attain substantial revenue growth contributed substantially by the aquaculture business together with two newly acquired subsidiaries for the forthcoming financial year ending April 30, 2009 (FY09).

 

He said in the chairman's statement in the company's latest annual report the above projections will enable Analabs to realise its goal of attaining future earnings per share target of 20 sen earlier.

 

The Main-Board listed company successfully recycled in FY08 an abandoned aquaculture farm, which is now able to produce seafood at a price that is cheaper than neighbouring countries, based on the recycling of seawater concept and biosecurity. 

 

On November 23, 2007, Analabs acquired the entire stake in Global Pacific Petroleum Sdn Bhd, which is principally involved in the manufacturing, blending and sales of lubricant-related products, from Glopac Bio-Ethanol Sdn Bhd for RM2.3 million (US$657,000) cash. 

 

The company also had on December 3, 2007 acquired the entire interest in Cleanway Disposal Services Pte Ltd, which is principally involved in the provision of containerised waste disposal services, causeway services, collecting and disposing of scrap, refuse and rubbish, designing and fabricating refuse compactors and containers for sale and rental, from three Singaporeans for RM6.7 million (US$ 1.9 million) cash. 

 

Upon the acquisition of the two new subsidiaries, Analabs' total current assets as at April 30, 2008 rose 13 percent to RM123.1 million (US$35.2 million) from RM108.9 million (US$31.1 million) a year earlier, while its total liabilities increased 50 percent to RM20 million (US$5.7 million) from RM13.3 million (US$3.8 million). 

 

For FY08, the company's net profit rose 12 percent to RM9.33 million (US$2.7 million) from RM8.32 million (US$2.4 million) a year earlier mainly due to increased contributions from its recovery and sales of recycled products and aquaculture businesses. 

 

Revenue climbed 20 percent to RM42.63 million (US$12.2 million) from RM35.4 million (US$10.1 million), while earnings per share jumped to 16.77 sen from 13.99 sen. The company declared an interim tax-exempt dividend of 3.3 sen per share for FY08 versus two sen per share in FY07. 

 

Based on Analabs' present market price of approximately 80 sen, the last interim dividend of 3.3 sen per ordinary share for FY08 was equivalent to a yield of approximately 4.1 percent per annum. 

 

Kan said with the present market price of approximately 80 sen per share, the company's goal is to gradually increase the annual dividend payout and capital appreciation to valued shareholders.

 

As at April 30, 2008, Analabs had cash and equivalents which included deposits pledged with licensed banks that amounted to RM24 million (US$6.86 million).The cash position was some 40 percent of its paid-up share capital of RM60 million (US$17.2 million). 

 

The company's net cash position declined 33 percent to RM24 million (US$6.86 million) from RM36 million (US$10.3 million) a year earlier mainly due to the acquisition of its quoted securities and the two new subsidiaries. 

 

According to Kan, the investments are for the long run and are expected to contribute positively towards Analabs' revenue and profitability. However, high fuel prices, rising cost of recycling and transportation may affect the company's profit margin.

 

Despite a volatile market condition, Analabs would not perish due to its latest research and development (R&D) and innovation efforts, which have brought about new ideas in waste disposal through its recently acquired Singapore subsidiary and the aquaculture business. 

 

He said both businesses had made significant contribution in compensating for lower profits for its investment in the equity securities, which are nevertheless intended to be held for long term and for good dividend yield and potential capital appreciation.