Triyards Holdings reported a 7% YoY rise in revenue to US$94.2m but saw a 73% drop in net profit to US$2.2m in 4QFY16, impacted by a US$1.7m impairment for its Houston facilities. On a full year basis, net profit fell 34% to US$17.8m, accounting for 87% and 82% of ours and the street’s full year estimates, respectively.

Stripping out the impairment and one-off items, we estimate core net profit to be S$4.5m in 4QFY16, such that the full year figure made up about 98% of our full year estimates, in line with expectations.

Unlike many of its peers, Triyards has managed to remain profitable in this tough environment. However, given the dim industry outlook, the group has not declared a dividend, compared to S$0.01/share the same period last year.

Pending more details from management, we maintain our BUY rating but put our fair value estimate of S$0.51 under review.

Source: OCBC Research - 21 Oct 2016