De.men (ASX: DEM) is a Singaporean-Australian decentralised business which designs, builds, owns and operates turn-key water and wastewater treatment projects for its clients. It was established in 2013 and serves two broad markets – Industrial Segment catering to customers in the mining; chemicals; electronics; oil & gas; and food & beverage and the second is Municipal & Residential segment. The company holds licenses for a broad portfolio of proprietary technologies including the exclusive global license for a revolutionary low-pressure hollow fibre nanofiltration membrane, developed by its Research & Development partner Nanyang Technological University (NTU), Singapore.
Its services include Operations and Maintenance (O&M); Build Own Operate (BOO)/ Build Own Operate Transfer (BOOT); and Consulting, Engineering and Optimization.
Recently, De.men bagged a huge 12-month AUD 780,000-million O&M contract, to be effective from January 2019, from Rio Tinto to manage the potable water and sewage treatment plants at the Amrun bauxite mine in Queensland’s Cape York Peninsula, Australia. The AUD 2.6-billion Amrun Project is being undertaken by the metals and mining giant Rio Tinto, an Anglo-Australian multinational.
One of the highest yielding and well-positioned business segment of De.men is O&M, which has continuously delivered sustained revenues over long periods, thus exhibiting a growing market demand as well as the company’s expertise in this domain. Going forward, the company is set to explore its products utility beyond Singapore, Queensland and Australia following its strong cash flow report for the quarter ending December 31st, 2018 (Q4 CY2018).
As per the highlights, the customer receipts stood at an impressive AUD 1.9 million in Q4 with cumulative cash receipts of AUD 10.8 million in CY2018. Also, the company reported having achieved its financial forecast for CY2018 with accounting revenues amounting to AUD 10.5 million based on preliminary unaudited financial statements. This represents a year-on-year staggering sales growth of approximately 262% compared to CY2017 revenues of AUD 2.9 million.
Even though, there were operating cash burns at approximately AUD 740,000, higher than the previous quarter but lower than Q4 2017, mainly resulting from variation in working capital, there is an excess of at least AUD 250,000 in customer payments yet to be received by year-end over supplier payments yet to be made, which will positively impact the cash flow stream in CY2019. According to De.men, investments in organic growth, a record-bidding activity in Q4 2018 plus an extensive sales pipeline built in Australia and Asia has laid out solid grounds to achieve sales growth in 2019.
The DEM stock debuted on the Australian Stock Exchange (ASX) in April 2017. It has a market capitalisation of around AUD 17.51 million with 116.71 outstanding shares. The stock has a 52-week high of AUD 0.272 and a 52-week low of AUD 0.112. With the close of the latest trading session on February 5th, 2019, the shares of DEM stock were trading at AUD 0.150.
Rio Tinto Limited (ASX: RIO), with a massive market capitalisation of AUD 32.17 billion is a large-cap company on ASX. The shares of RIO stock were trading at AUD 89.260, up 2.988%, indicating an intra-day gain of AUD 2.590, with the close of the trading session on February 5th, 2019.
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