OKP on the road to riches, FY11 earnings seen to leap 25%

Singapore’s only listed road firm is riding on the building boom with a S$433m order book.

OKP, whose earnings grew 8.3%YoY in 3Q11 to S$4.9m, is currently benefiting from major public works like the S$6-7b North-South Expressway.

In a statement, DMG Research said OKP’s strategic tie up with China Sonangol (CS), which owns 14.1% of OKP, is a gateway to more potential projects.

With a cash hoard of S$95.8m (net cash of 31.1S¢ per share) and a financially strong partner like CS, OKP’s construction earnings may be given an added boost with property development.

With a record gross order book of S$433.4m, FY11 looks set to be a banner year for OKP. The road company’s earning is seen to jump 25% to S$21.3m in FY11 and S$23.7% in FY12, representing a 10.9% YoY increase.

DMG Research said OKP is “in the right position to ride the growth” in the public works sector given its solid earnings and strong balance sheet.

Currently, OKP has a healthy order book of S$433.4m (S$327.6m as at Dec 10), to be fulfilled by FY14.

Some projects in the pipeline include the new dual four-lane Lornie Road in Bukit Brown, road improvement works in the Kallang area to improve road connectivity for the upcoming Sports Hub, the North-South Expressway and the widening/ improvement of existing expressways.

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