Geo Energy this evening said that it has commenced its first-ever share buyback, as it considered its shares to be undervalued by the market.

Stock price 

32 c

52-week range

16 – 43 cts

Market cap

S$454 m

PE (trailing)

3.4

Dividend yield

9.37%

1-year return

94%

Shares outstanding

1.4 b

Source: Bloomberg

The move is also part of the Singapore-listed coal miner’s long term capital management.

Today (15 Dec 2021), the Company bought back 2,300,000 shares from the open market, representing 21.6% of the 10,653,300 shares traded for the day.

The purchases were made at S$0.315 - S$0.32 a share.

Geo Energy said it intends to execute the buybacks in "a controlled and orderly manner over a reasonable period of time to minimise undue movement in the Company’s share price."

Geo Energy will be holding the repurchased shares as treasury shares for various purposes, including to fund its employee share incentive schemes.

 

TungKumHon3tb 1.2016CEO Tung Kum HonMr Tung Kum Hon, Chief Executive Officer and Executive Director of Geo Energy, said: 

“We are committed to enhancing value for our shareholders. The share buyback is part of the Company’s long term capital management. Together with our dividend policy of at least 30% returns to our shareholders based on our earnings, subject to any capital requirements, embarking on a share buyback would increase value for our shareholders and strengthen our return on equity. Our cash balance as at 12 December 2021 was US$164 million, after payment of US$31 million interim dividends (S$0.03 per share) on 29 November 2021 and prepaying US$63 million of the US$ Bonds with interest in October 2021."

Dividends

1Q2021

2Q2021

3Q2021

S$’m

7

7

42

cents/share

0.5

0.5

3


Geo Energy noted that China’s imports unexpectedly accelerated as the country scrambled to restock depleted commodities like coal. Imports climbed 31.7% in November, the highest level in 2021 as fuel scrambled during the onset of winter to feed its power system which had been experiencing shortages.1 Given that China still has limited energy capacity and will need time to build it up, energy-related imports will continue in the coming months.2

Mr Tung added: "As previously announced on 8 December 2021, the JORC VALMIN valuation of our SDJ and TBR coal mines and the performance of the Group has shown that our shares are undervalued. We are expecting a better performance for the last quarter of 2021 and the highest quarterly results ever. With the commencement of our first share buyback, together with our dividend policy, we will continue to return surplus capital to our shareholders, enhance the efficiency of our capital base and increase value for our shareholders.” 

1 https://www.reuters.com/world/china/china-nov-exports-rise-22-yy-imports-up-317-2021-12-07/

2 https://www.businesstimes.com.sg/government-economy/chinas-export-growth-lost-steam-in-november-official

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