By Shaina Kamlesh Mahtani & Tang Kai Jie, UOBKH

FY26: Strong Earnings Growth And Improving Outlook

FY26 revenue rose 3% yoy to S$360.7m while PATMI surged 128% yoy to S$33.3m, forming 95%/103% of our forecasts respectively. Gross margin expanded 4.1ppt yoy to 21.4%, while finance costs fell 66% yoy as ASL continued to deleverage.

•⁠  ⁠Ship chartering was the main growth driver. Revenue rose 10% yoy to S$105.3m, while gross margin improved sharply to 20.1% from 5.7%. The S$61m orderbook provides visibility, with demand supported by infrastructure and energy-related projects across Asia.

•⁠  ⁠Ship repair remained a resilient core contributor. Revenue was broadly stable at S$170.9m, supported by higher-value repair projects, despite softer contributions from precast projects in 2HFY26.

•⁠  ⁠Shipbuilding pipeline moderated. Revenue remained broadly flat at S$84.5m while gross margin improved to 18.4%. The S$18m orderbook reflects softer tug and barge demand from Indonesia’s coal market.

Stronger Balance Sheet Supports Higher Dividends. Cash rose to S$30.1m and net gearing improved to 0.59x. ASL proposed a final dividend of 0.17 S cents/share, bringing total FY26 DPS to 0.30 S cents, up 50% yoy.

Maintain BUY with a lower TP of S$0.41, pegged to an unchanged 12x FY27F PE, in line with peers’ average. The lower TP mainly reflects dilution from ASL’s enlarged share base following its recent share issuance. We maintain our earnings forecasts and introduce FY29F estimates.

Link: https://research.uobkayhian.com/content_download.jsp?id=92452&h=c61a0d2d9fdd8659981195ed25aa695b