Riverstone Holdings

[Nick]

Riverstone reports 21% rise in 2Q 2011 revenue to RM65.5 million - declares interim dividend of 2.2 sen (RM) per share

http://info.sgx.com/webcoranncatth.nsf/V...10031030F/$file/Riverstone_2Q_2011_Press_Release_FINAL.pdf?openelement [Press Release]

http://info.sgx.com/webcoranncatth.nsf/V...10031030F/$file/Riverstone_2Q_Announcement.pdf?openelement [SGX Announcement]

http://info.sgx.com/webcoranncatth.nsf/V...20005FF63/$file/Riverstone_2Q2011_AnalystBriefing.pdf?openelement {Presentation Slides]

There has been a recovery in the 2Q performance due to the growing capacity and the demand for healthcare gloves. Riverstone has reported 6 years of continuous profit growth with ROE exceeding 15% for each of those years. This is pretty good considering that they have maintained a net cash position since listing. Moreover, it has raised its dividends for 5 consecutive years. This year interim dividend is the same as last year. The second phase of the capacity expansion will be completed at the end of the year which will boost its production capacity to 2.3 billion gloves (2010: 1.8 billion gloves).

The key risk will be the USD/MYR rates and MYR/SGD rates. The strong SGD discourages investments in regional companies. Volatile raw material cost is impacting its margins at the moment.

(Not Vested)