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United Global Limited - SAC Capital 2021-08-12: Higher Oil Prices Benefited Group’s Lubricant Business

UNITED GLOBAL LIMITED (SGX:43P) | SGinvestors.io UNITED GLOBAL LIMITED (SGX:43P)

United Global Limited - Higher Oil Prices Benefited Group’s Lubricant Business

  • United Global (SGX:43P)'s 60%-owned United Oil Company Pte Ltd (UOC) reported a 94.8% rise in revenue to US$66.2 million in 1H2021 boosted by an increase in sales volume and higher average selling price. As a result, gross profit rose 74.9% to US$14.6 million despite registering lower gross margin at 22.1% due to higher raw materials costs.
  • Overall, UOC recorded profit of US$6.6 million, 74.9% higher y-o-y. However, UOC’s contributions are equity-accounted. United Global booked its share of US$3.4m in its P&L.



60%-owned lubricant JV continued to be main contributor United Global Group.

  • In 1H2021, United Global recognised revenue of US$2.7 million contributed by its nano-fibre oil absorbent manufacturing business and one-off sales of a cargo of gasoil. The Group recorded gross loss of US$0.2 million as its nano-fibre oil absorbent manufacturing business continues to run at sub-optimal capacity. Other income increased by 84.5% to US$1.2 million due to write back of inventories.
  • Together with share of UOC’s earnings, United Global's net profit increased by 91.9% to US$3.2 million.


Looking for new business opportunities.

  • On top of its lubricant business and its nano-fibre oil absorbent manufacturing business, United Global has identified three new business segments to grow recurring revenue. These are
    1. logistics or shipping businesses,
    2. trading of petrol related products and
    3. materials recycling and sustainability businesses.
  • On 26 January 2021, United Global, acquired an indirect 22.05% stake in PT Latitude Inti Mitra Abadi (LIMA) for US$2.0 million. PT LIMA is a logistics company that operates in the Indonesian and Malaysian waters. It owns five sets of tugboats and barges, and one container vessel.

Maintain our call at HOLD.






Lam Wang Kwan SAC Capital Research | https://www.saccapital.com.sg/ 2021-08-12
SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.445 SAME 0.445



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