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PACIFIC
RADIANCE
3QFY2014 & 9MFY2014 Results
Delivering Steady Growth
13 November 2014
Private & Confidential | 2
Disclaimer Important Information
This presentation is made for informational purposes and does not constitute or form any part of and should not be construed as an offer or invitation to
sell or issue, or any solicitation of any offer to subscribe for or purchase any securities of Pacific Radiance Ltd. (the “Company”) or any of its subsidiaries,
associated companies or joint ventures (collectively with the Company, the “Group”) in any jurisdiction or an inducement to enter into investment activity
and nothing contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation is
being furnished to you solely for your information and may not be reproduced or redistributed to any other person or published, in whole or in part, for any
purpose. No representation or warranty, express or implied, of any nature is given as to, and no reliance should be placed on, the fairness, correctness,
accuracy or completeness of the information or opinions presented or contained herein.
The information and opinions in this presentation are provided as at the date of this presentation and are subject to change without notice. It is not the
intention of the company to provide, or to allow any person to rely on the presentation as providing a complete or comprehensive analysis of the
business, condition, performance, results of operation and/or prospects of the Company. No assurance is made as to the accuracy of this presentation
and it may be incomplete or condensed and it may not contain all material information concerning the Company or the Group. The information in this
presentation is not financial product advice and does not take into consideration the investment objectives, financial situation or particular needs of any
particular person.
There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinions, assumptions,
projections, forecasts or estimates set forth therein, changes or subsequently becomes inaccurate. None of the Company nor any of its respective
affiliates, officers, employees, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising
from any use of or reliance on the information or opinions contained in this presentation.
Any discrepancies in the tables included herein between the listed amounts and the consolidated financial statements of the Company are due to
rounding.
Forward Looking Statements
This presentation contains forward-looking statements which may be identified by their use of words like "plans", "expects", "will", “guidance","
anticipates", "believes", "intends", "projects", "estimates" or other words of similar meaning. All statements that address expectations or projections about
the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial
results, are forward-looking statements.
All forward-looking statements are subject to risks and uncertainties as they are based on certain assumptions and expectations of future events. The
Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements,
could thus differ materially from those projected in any such forward-looking statements. The Company has no obligation to, and does not intend to,
publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise.
3
Financial Results
Delivering Steady Growth | 4
• Improved utilisation of diversified, market-relevant OSV fleet
• Ongoing fleet rejuvenation programme
•Prompt deployment of newly delivered offshore support vessels
SNAPSHOT OF 9MFY2014
+7%►US$135m
Revenue
+8%►US$48.2m
Gross Profit
+57%►US$63.3m
PATMI
Delivering Steady Growth | 5
REVENUE GROWTH
9MFY2014
Higher revenue : Mainly from Offshore Support Services division which saw contributions from new
vessels joining the fleet.
3QFY2014
Lower revenue: Subsea unit saw lower utilisation and one of its diving support
vessels (‘DSV’) was drydocked for enhancement work
59.8
95.1
130.8
168.6
48.6 44.4
126.2 135.0
0
20
40
60
80
100
120
140
160
180
Revenue (US$'m)
Delivering Steady Growth | 6
STRONG CORE BUSINESSES Segmental Revenue Breakdown
9MFY2014:
Offshore Support Services: Remains Group’s key revenue contributor; revenue rose 19%
y-o-y to US$98.4m.
Subsea Services: Revenue down 14% y-o-y due to lower utilisation in 3QFY2014 and
drydocking of Group’s two diving support vessels for enhancement works
% o
f T
ota
l R
even
ue
95.0%
83.0% 84.0%
64.7% 65.6% 72.9%
12.0% 13.3%
27.0% 26.2% 21.0%
5.0% 5.0% 2.7% 8.3% 8.2% 6.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY2010 FY2011 FY2012 FY2013 9MFY2013 9MFY2014
Offshore Support Services Subsea Business Complementary Business
Delivering Steady Growth | 7
14.8 18.5
32.1
55.5
10.6 13.1
40.4
63.3
0
10
20
30
40
50
60
70
PATMI (US$'m)
10.4
30.2
37.1
59.2
20.0
9.4
44.8 48.2
0
10
20
30
40
50
60
70
Gross Profit (US$'m)
ON TRACK FOR RECORD FY14 EARNINGS
Gross margin held steady at 36% in 9MFY14. Earnings from Offshore Support division
buffered Group from lower utilisation of its DSVs which also underwent drydocking for
enhancement works.
Lower gross profit for 3QFY2014 was attributable to Subsea division due to lower utilisation of
the DSVs and the drydocking of one of the DSVs during the quarter.
Newly delivered offshore support vessels helped to lift gross profit by 8% to US$48.2m.
Ongoing fleet rejuvenation programme and lower finance costs drove PATMI up 24%
for 3QFY2014 and 57% for 9MFY2014.
Delivering Steady Growth | 8
STRONG FINANCIAL POSITION
US$’000 As at 30 Sep 2014 As at 31 Dec 2013
Non-current assets 590,798 593,774
Current assets 253,845 152,095
Current liabilities 110,500 118,834
Non-current liabilities 307,935 249,584
Shareholders’ Funds 426,208 377,451
Net gearing (x) 0.5 0.6
The Group’s net gearing improved to 0.5x as at 30 Sep 2014.
Group net assets rose US$48.8m to US$426.2m on higher cash & cash equivalents,
amounts due from related companies, and investment in JVs and associates.
S$1 billion Multicurrency Debt Issuance Programme in August 2014 strengthens
Group position to drive its strategy forward. Group has issued S$100m 4-year fixed
rate notes at coupon rate of 4.3%.
Delivering Steady Growth | 9
POSITIVE OPERATING CASHFLOW
(US$’000) 3QFY2014 3QFY2013
Net cash generated from / (used in) operating activities 7,912 (19,586)
Net cash generated from / (used in) investing activities (10,896) (91,804)
Net cash generated from / (used in) financing activities 70,535 101,755
Net increase/ (decrease) in cash 67,551 (9,635)
Cash and cash equivalents at beginning of period 73,050 34,637
Cash and cash equivalents at end of period 140,601 25,002
Group generated US$7.9m in net cash from operations
Net cash used in investing activities was mainly for fleet expansion. Group recognised a
US$35.2m gain from the sale of 8 vessels in 9MFY2014. In 9MFY13, the sale of 6 vessels
brought a gain of US$12m.
Industry Prospects
Delivering Steady Growth | 11
SHALLOW & MID-WATER – STILL GOOD
Current weak oil prices remain above the break-even cost of production in the
shallow and mid-water segments
US$30-40/bbl in Southeast Asia; US$20-30/bbl in Caspian Sea^
Oil prices expected to straddle the $90-$100/bbl mark for the next five years on
average. Majority of major projects will be viable at these levels.*
Resilient and tested business model
Group’s diverse fleet primarily supports production in shallow and mid-water
O&G activities
Lower acquisition cost of newbuilds
^ Source: "Singapore Daily: Offshore & Marine – Singapore, UOB Kay Hian, 20 Oct 2014“
* Source: “Douglas-Westwood: Offshore Marine Asia, Market Outlooks & Opportunities”
Delivering Steady Growth | 12
BRIGHT SPOTS – WELL POSITIONED Expect E&P spending of national oil companies (NOCs) to continue to grow
NOCs have strategic agenda to shore up domestic oil production to maintain
self-sufficiency
OSV charter rates to remain relatively firm in high growth and/or cabotage-protected
markets
Growing population and affluence in emerging economies in Asia, Latin America and
Africa will drive energy demand
Expect global demand for subsea vessels to accelerate at 7% CAGR#
Global subsea vessel spending is forecast at US$122b for the 2015 - 2019 period
Field development and Inspection maintenance and repair (IMR) work remain key
drivers
IMR work to account for 39% of expenditure
Asia will be the single largest market with 20% of global expenditure, driven by
shallow water IMR and pipelay-related activities
# Source: “Demand for subsea vessels likely to increase says analyst”, Offshore Shipping Online, 23 October 2014
Delivering on Our Strategy
13
Delivering Steady Growth | 14
DELIVERING STEADY GROWTH
Our diversified and market-relevant fleet, and geographic focus on high growth and
cabotage-protected markets have seen us through various oil & gas cycles. We aim
to deliver steady growth over the medium to long term.
Maintain a broad-based and relevant fleet
Continue to deepen and expand geographic reach in key emerging markets - Asia,
Latin America and Africa.
Continue to selectively expand the fleet through our newbuilding programme
Strengthen operational capabilities and improve cost efficiency by enhancing supply
chain
New ship repair yard to be completed in 2016 will cut costs and vessel
downtime, and also bring in a new income stream
Stay responsive and aligned to changes in the business environment where growth
opportunities still abound.
On track to post record results in FY14, barring unforeseen circumstances.
Thank You
Questions & Answers