Destini banks on MRO business

Business & Markets 2013
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
Thursday, 16 May 2013 09:07
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KUALA LUMPUR: Destini Bhd, recently uplifted by Bursa Malaysia from
its PN17 status, is banking on its enhanced maintenance, repair and
overhaul (MRO) business to triple its profit this year.
For 2012 financial year ended December (FY12), the company
recorded a net profit of RM7.06million against RM7.24 million in FY11. It
has made several new acquisitions recently to strengthen its MRO
business.
Group managing director Datuk Rozabil Abdul Rahman said the
company plans to allocate an additional capital expenditure (capex) of
up to RM20 million to buy companies to expand the group’s MRO
capabilities.
“We would like to be known as a company that provides excellent MRO
services to the marine, aviation and oil and gas [O&G] industries,” he
said, adding that the capex would be funded through a private
placement of up to 33 million new shares of 10 sen each.
Destini recently paid RM42 million to buy Techno Fiber Sdn Bhd, which
undertakes MRO for lifeboats and rafts. It also bought SMR
TECHNOLOGIES BHD [] which has enabled the group to expand its
MRO services to the aviation and marine sectors.
Late last year, Destini bought 51% of Vanguard Composite Engineering
Pte Ltd, a Singapore-based company involved in the lifeboat
manufacturing business. This acquisition has contributed significantly to the group’s recent earnings.
“Vanguard makes us the third largest lifeboat manufacturer in the world,” Rozabil said after the company AGM and EGM
yesterday.
Destini, as part of business expansion plans to diversify its income stream, is also aiming for more commercial contracts.
Currently, it relies on government contracts for most of its marine and aviation business — its RM580 million contract with the
Royal Malaysian Air Force is scheduled to end this year.
“Our aviation contracts are mainly from the government. We would like to move into the commercial aviation business,” said
Rozabil, adding that the company aims to have 60% to 75% of its total revenue this year come from commercial MRO
contracts.
Rozabil said the group is waiting for a European Aviation Safety Agency certification in the third quarter of this year to service
commercial aircraft.
The group recorded a turnover of RM16.34 million and net profit of RM2.41 million for the first quarter ended March 31
(1QFY13). This was higher compared with a turnover of RM8.38 million and a net profit of RM1.44 million in 1QFY12.