Pantech hopeful of another good year

PANTECH Group Holdings Bhd (5125), which makes pipes and fittings for the oil and gas industry, is hopeful of another good year after surging exploration activities boosted demand for its products and bolstered last year's profit.

"Before the credit crunch, the world saw rising crude oil prices hit a high of US$147 (RM520) a barrel in 2008. This situation worked out in Pantech's favour," managing director Jimmy Chew said.

"It led to higher expenditure in exploration activities and development of new fields were accelerated, thus creating an unprecedented demand for our pipes, fittings and flow control products," he told reporters after a shareholder meeting in Kuala Lumpur yesterday.

Pantech's net profit soared 80 per cent to RM61.5 million in the financial year ended February 28 2009, while revenue jumped 63 per cent to RM511.6 million.
"We can't tell (if this year's performance will match last year's). It's still ongoing. But we hope so," Chew said.

It takes more than two years to construct an oil rig and the demand for equipment will still be there even if oil prices have now retreated, he explained.

Pantech supplies high-pressure and specialised steel pipes, fittings, flanges, valves and other related products for the oil and gas, marine, onshore and offshore, heavy engineering, power generation, petrochemical, palm oil refining, and other industries.

The business has been resilient since it was set up in 1987.

Pantech's earnings continued to grow during the downturn following the 1997 Asian financial crisis, thanks to stable demand in the oil and gas industry, executive director Adrian Tan said.

The company, which exports to 13 countries, constantly seeks more markets. It has bought land next to its factory in Klang, Selangor, and warehouses in Pasir Gudang, Johor, to cater for future expansion, Tan said.

19/8/2009