SAPEX’s significant 2019 turnaround

Decades ago, the US military were confounded by transport issues in adverse terrain conditions. Inhospitable terrain such as soft and shifting soils and a lack of stable roads, meant that they were stuck; moving vehicles through such difficult landscapes seemed impossible. That is, until a few bright minds in the military came up with an idea: an engineered platform solution of large, moveable mats that could essentially be laid down and locked together, so that anything from a truck to a tank could move across them with ease.

The Dura-Base® Composite Mat System is all about creating efficient access; the mats can be placed in difficult terrain with minimal impact on the environment, allowing companies to move heavy vehicles through difficult terrain without digging up the ground or committing to permanent roads. The beauty of the system is that once the job is done, the mats can simply be picked up, dusted off, and reused for another decade.

Despite the mats themselves being moveable and transitory, there is nothing temporary about SAPEX, the exclusive distributor for the mats in Indonesia.

Coining 2019 a year of significant development, the company has made impressive progress in the first half of the year alone, transitioning from being a distributor to being an owner operator with their own mat inventory; taking control of their own client relationships.

Part of the turnaround plan included acquiring new licensing, contracts and revenues; exploring multiple industrial sectors such as oil and gas, agriculture, infrastructure, civil construction, mining and operations, much of which SAPEX has achieved in the first half of 2019.

Amongst an abundance of success, SAPEX has secured new contracts with repeat clients Ophir Indonesia and Pertamina EP EOR as well as a three-year extension to the exclusive Distribution License for Indonesia with Newpark Mats & Integrated Services LLC. This 3 year extension is a significant improvement on the rolling year on year license that had been in place for 12 years, demonstrating a show of faith by Newpark in SAPEX’s ability to deliver on the key KPIs tied to the license.

Also announced earlier this month, SAPEX has entered into a contract with global heavy transport and lifting company ALE Heavy Lift. And the PGN SAKA contract awarded at the end of 2018 has been extended for another year and is expected to generate additional revenues of $1 million USD.

With their 2019 base contract values already in excess of $2 million USD, SAPEX are primed for growth as they endeavor to scale the company and create an owner operator business model that could be replicated into other geographical markets and multiple customer sectors.

The company is expecting to generate significant top line and bottom line growth as a result of their efforts to turn the company around this year and are on track to achieve all of its financial and operational targets for 2019. Having taken critical steps to transition from an agency business model to an owner operator model, they will use the mat services as the foundation for growth. Going forward, the company will be driven by a combination of deployment of an extended mat inventory, a customer portfolio of long-term and short-term mat users, and revenue from various sectors.

Furthermore, one of SAPEX’s most forthright goals remains their commitment to obtaining a listing on the ASX – something they aim to achieve before the end of 2019.

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SAPEX Group trades under the NSX code: ‘SAA’

More information on SAPEX Group can be found at their Investor Centre.

*Reach Markets is paid a retainer to assist SAA with private investor management.