BH Global Marine says it is cautiously optimistic of its business prospects in the current year and expects the demand for its products and services to remain stable. It also expects consolidation within the industry as credit tightening by banks will adversely affect the smaller competitors.

Q3 turnover went down 6% to S$22.7 mln as it sold less marine electrical equipment. But Q3 2007 in comparison was an exceptional quarter as BH Global Marine pushed forward some projects from Q4 2007.

Its overall gross profit margin increased from 38% in Q3 2007 to 41% in Q3 2008. This was mainly due to the weaker US dollar in Q3 2008. Net profit rose 3% to S$5.1 mln.

It generated S$6.7 mln in cash from operations compared to the S$5.3 mln it burnt the previous year. It could have been higher if not for the rise in inventory costs to S$3.2 mln from S$1.8 mln the previous year.

This stock is not covered by Reuters. It was last traded at S$0.16.

~ Jin San’s take ~
Although BH Global Marine says it expects demand for its products to continue, the global downturn is taking its toll on the shipping industry. The Baltic Dry Index plunged 10.7% cent on the day, to 1,615 pts on 15 October, its lowest level since February 2003. With the slowdown in shipping activity, we wonder if BH Global Marine will still see a constant level of demand for its products.

As always, please see your licensed financial advisor before making any investment decisions.