Hyflux

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
The Tuas situation raises the question: are clever deals overshadowing clever technology? Hyflux has not invented some totally new method of desalination for Tuas II, but the “first-year water price” it has published – US$0.35/m3 – might make some onlookers think that it had. In fact, I would be surprised if the US$0.35/m3 covered even the energy costs of the plant.

********
Christopher Gasson takes his hat off to Hyflux’s Olivia Lum for her Tuas II bid.

Singapore - based Hyflux has pulled off something of a coup by securing preferred bidder status in the race to build the Tuas II desalination plant. Although the proposed “first-year water price” of US$0.35/m3 is absolute nonsense, even Hyflux’s competitors such as IDE of Israel must acknowledge that CEO Olivia Lum has put together a proposal of true genius.


The situation was as follows. The Singapore Public Utilities Board invited bids to build and finance a 318,500m3/d desalination plant. This on its own would not be a major problem for Hyflux; the company knows about desalination. But there was a catch: the request for proposals specified that there would be no passthrough on the power. Instead, if one bidder could obtain electricity at a lower price than the others, it would have an advantage. This specification seemed to put local power station owners Keppel and Sembcorp in a better position to win the project than Hyflux, which does not have any power interests.

But Hyflux was not going to take this lying down. The company looked at the price of buying electricity from the grid, and looked at the price Keppel and Sembcorp are paid for supplying electricity to the grid, and decided it could do better. Just as IDE decided to build a captive power station for the Ashkelon desalination plant in Israel in order to keep the power costs down, so Hyf lux decided that building its own power station would also be the best way of holding the power costs down at Tuas II. But whereas IDE ordered an 81MW plant to supply the 330,000m3/d Ashkelon desalter, Hyf lux went one step further. It is proposing a 411MW power plant for Tuas II. This would imply that it is intending to sell a whole lot of electricity back to the grid.

Credit Suisse analysts reckon that in order for the numbers to add up, around 50% of the project’s revenues will have to come from electricity sales. What makes it particularly delicious is that the expected level of utilisation of the plant is quite low – in assessing the bids, PUB assigned a 70% weighting to the water price if the plant was being utilised at only 10% of capacity. At this utilisation level, there would be a whole lot of redundant power to sell on to the grid at a profit. These power sales profits could then be used to cross-subsidise the water price, enabling Hyflux to deliver a knockout low bid.

Keppel and Sembcorp are probably wondering what hit them. Not only did they lose a bid that they were probably expecting to win, but they have also found themselves with a new competitor in the power market. It is the price of complacency.

In my view, this deal shows that Hyflux can be at least as creative as ACWA Power of Saudi Arabia when it comes to innovation at every level to deliver the lowest water price. Indeed, we may soon see the two companies competing directly: Hyflux intends to enter the independent water and power plant market globally.

The Tuas situation raises the question: are clever deals overshadowing clever technology? Hyflux has not invented some totally new method of desalination for Tuas II, but the “first-year water price” it has published – US$0.35/m3 – might make some onlookers think that it had. In fact, I would be surprised if the US$0.35/m3 covered even the energy costs of the plant. Both the company and PUB concede that the figure was not the price on which the bid was determined. We don’t know the levelised water price of the plant, which is the more usual benchmark for the cost of water from a privately financed desal plant. It is likely to be at least US$1.00/m3, given the low level of expected utilisation. What we do know is that Hyf lux came up with the best deal for PUB, and clever deals are often more important in this business than clever desal.

Is that a bad thing? In my view, you can’t have one without the other. It is because clever deal-makers like Olivia Lum and Mohammed Abunayyan (of ACWA Power) continually find new ways of keeping the cost of everything else down, that advances in technology actually show up on the bottom line.
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
Reply
not sure if this is going to be profitable, neither am i sure the shareholders are going to be sitting comfortably.

but i am pretty sure that this lady has BALLS!!
Reply
Hyflux revenue falls 25% in 2Q on lower China contributions

Hyflux, Singapore’s biggest publicly traded water company, reported a 25% drop in revenue from a year ago in the second quarter, citing lower contributions from China.

Sales declined to $138.4 million in the three months ended June 30 from $183.6 million in the same period last year, according to a statement to the Singapore stock exchange yesterday. Second quarter net income was $17.7 million, higher than $17.5 million a year ago, according to the statement.

http://www.theedgesingapore.com/the-dail...tions.html
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
http://infopub.sgx.com/FileOpen/News_Rel...eID=259858

Retirement of Dr Andrew Ngiam as Group Chief Operating Officer and Group Executive Vice President, with Mr Wong Lup Wai, Group Executive Vice President at Hyflux, taking over the management of the Group’s global projects execution portfolio.

I think that Hyflux must be valuing Mr Wong quite highly. Just 3 months ago, he was promoted to Group Executive Vice President .


(Not vested)
Reply
Hyflux profit surges 74% on municipal projects

SINGAPORE - Hyflux, Singapore’s largest publicly traded water treatment company, announced on Thursday a 74 per cent rise in third-quarter earnings, buoyed by municipal projects across Asia, Bloomberg News reported.

Net profit for the three months ended Sept 30 was S$25.3 million, compared with S$14.5 million for the year-earlier period, the company said in a statement. Revenue for the period rose 26 per cent to S$187.7 million.

Completion of projects “markedly lifted growth” while the China market contributed 4 per cent to total revenue in the quarter, a drop from 14 per cent a year earlier. Hyflux also said it would be “actively pursuing desalination and water-recycling opportunities in the industrial water sector.”

Hyflux and Singapore’s national water agency PUB opened the city-state’s largest sea water reverse-osmosis desalination facility, Tuaspring, in September. Given the Dahej desalination project in India that’s on course for financial close in 2014 and Tuaspring’s completion, Hyflux said it anticipated a slower fourth quarter.
http://www.todayonline.com/business/hyfl...l-projects
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
Hyflux raising fund, again, but this round by equity, not debt...

(not vested)

--------------
PROPOSED ISSUANCE OF S$300,000,000 IN AGGREGATE PRINCIPAL AMOUNT
OF 5.75% PERPETUAL CAPITAL SECURITIES

Ref: http://infopub.sgx.com/FileOpen/Closing_...eID=271040
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
(16-01-2014, 11:04 AM)CityFarmer Wrote: PROPOSED ISSUANCE OF S$300,000,000 IN AGGREGATE PRINCIPAL AMOUNT
OF 5.75% PERPETUAL CAPITAL SECURITIES

surprised they managed to get away with just 5.75% - previous retail tranche was at 6%
Reply
(16-01-2014, 11:06 AM)AlphaQuant Wrote:
(16-01-2014, 11:04 AM)CityFarmer Wrote: PROPOSED ISSUANCE OF S$300,000,000 IN AGGREGATE PRINCIPAL AMOUNT
OF 5.75% PERPETUAL CAPITAL SECURITIES

surprised they managed to get away with just 5.75% - previous retail tranche was at 6%

Water industrial is the "in" sector nowaday, may be one of the reasons...
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
(16-01-2014, 11:06 AM)AlphaQuant Wrote:
(16-01-2014, 11:04 AM)CityFarmer Wrote: PROPOSED ISSUANCE OF S$300,000,000 IN AGGREGATE PRINCIPAL AMOUNT
OF 5.75% PERPETUAL CAPITAL SECURITIES

surprised they managed to get away with just 5.75% - previous retail tranche was at 6%
Yes strange! Interest Rate is supposed to be trending up. Has it trended up a little already?
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
Reply
For those vested and interested...

(not vested)

Singapore’s Hyflux says profit fell 28% on water project timing

Hyflux, Singapore’s biggest publicly traded water company, said 2013 profit fell 28% because of the timing of projects finished during the year.

Net income was $44 million compared with $61 million a year earlier, the Singapore-based company said today in a statement. Sales slid 18 percent to $535.8 million.

Hyflux and Singapore’s national water agency PUB opened Tuaspring, the city-state’s largest seawater reverse-osmosis desalination facility, last September. The company expects a slower first half this year due to works being completed and the timing of projects, it said in the statement.

The company is focusing more on actively bidding for projects in the Middle East and Africa beyond its established markets in Asia and Algeria. “The outlook for the global water industry has improved and more water infrastructure projects are being made available for public tenders,” it said.
...
http://www.theedgesingapore.com/the-dail...ming-.html
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply


Forum Jump:


Users browsing this thread: 8 Guest(s)