Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.
“FY2017” denotes the full financial year of FY2017.
“FY2016” denotes the full financial year of FY2016.
% Change” denotes increase/(decrease) in the relevant profit or loss item as compared with the comparative figure.
"NM" denotes not meaningful.
The Group, comprising the Company and its subsidiaries, is a reputable regional integrated marine logistic company principally engaged in shipping and shipyard businesses.
The shipping business of the Group relates to the chartering of Offshore Supply Vessels (“OSVs”), comprising mainly Anchor Handling Tug Supply (“AHTS”) vessels, for deployment in the regional waters, including the Gulf of Thailand, Malaysia, Indonesia and Australia, as well as the chartering of tugboats and barges to customers, especially those which engaged in the mining, commodities, construction, infrastructure and land reclamation industries.
The shipyard business of the Group relates to shipbuilding as well as the provision of ship maintenance, repair, outfitting and conversion service which are being carried out through its shipyard located in Batam, Indonesia. Occupying a total land area of approximately 34 hectares with a seafront of approximately 650 meters, the modern shipyard also houses three dry docks, which boost the Group’s technical capabilities and service offerings to undertake projects involving mid-sized and sophisticated vessels.
Review of financial performance of the Group
The Group’s revenue for FY2017 vis-à-vis FY2016 is tabulated as follow:
The revenue of the Group decreased by 18% from S$46.9 million in FY2016 to S$38.6 million in FY2017.
The revenue for the Group’s Ship Building & Repair Operations decreased by 26% to S$22.1 million in FY2017 from S$29.8 million in FY2016, primarily as a result of reduced ship building projects.
Due primarily to lower contributions from the Group’s offshore fleets amidst the continuing lackluster performance in the Oil & Gas sector and from the Group’s shipbuilding and repairs, the gross profit of the Group reduced by 87% or S$6.9 million from S$8.0 million in FY2016 to S$1.1 million in FY2017.
The other operating income of the Group decreased by 84% or S$ 5.6 million from S$6.6 million in FY2016 to S$1.0 million in FY2017. The other operating income registered by the Group in FY2016 and FY2017 were both largely attributed to reversal of excess impairment on investment in a joint venture.
In line with reduced business activities and as a result of the Group’s concerted cost containment efforts, the administrative expenses reduced by 21% from S$7.2 million in FY2016 to S$5.7 million in FY2017.
The other operating expenses of the Group increased from S$10.0 million in FY2016 to S$252.5 million in FY2017, primarily as a result of impairment of assets, which were reinstated to their fair market values as determined by an external valuer.
The finance costs of the Group increased by S$4.3 million or 74% to S$10.2 million in FY2017, from S$5.9 million in FY2016, due mainly to the write-off of a recoverable amount due from PPL Shipyard Pte Ltd (“PPL”), following a settlement reached with PPL (as announced by the Company on 13 November 2017), and an increase in interest rate payable to holders of the restructured Notes (as announced by the Company on 18 October 2016).
The share of losses from jointly-controlled companies was S$45.4 million in FY2017 compared to S$9.6 million in FY2016. The share of losses from jointly-controlled companies was mainly attributable to the share of impairment loss on their assets.
Excluding the impairment of assets aggregating S$242.1 million, share of impairment losses recognized by jointly-controlled entities of S$43.7 million and provision for expenses accrued till 30 September 2017, in connection with the Debt Refinancing and Restructuring Exercise of S$6.9 million, the adjusted total loss incurred by the Group for FY2017 would have been S$20.0 million (instead of S$312.7 million).
(b) Review of financial position of the Group as at 30 September 2017 compared to that as at 30 September 2016
The impairment of vessels and investment in joint ventures as well as depreciation of AHTS and share of losses in jointly-controlled companies resulted in a decrease in the non-current assets of the Group from S$318.9 million as at 30 September 2016 to S$99.6 million as at 30 September 2017.
The decrease in trade receivables was attributed mainly to impairment.
Subsequent to the termination of two completed shipbuilding projects (due to the failure by a customer concerned to take delivery) and impairment made to the same, to be followed by a reclassification of the same to inventories (which had also undergone certain impairment adjustments), the total amount due from customers was reduced to S$3.0 million as at 30 September 2017, from S$47.4 million as at 30 September 2016, with inventories increased from S$12.2 million as at 30 September 2016, to S$15.1 million as at 30 September 2017.
The decrease in other receivables, deposits and prepayments was mainly due to the write-off of a deposit paid in connection with a disputed rig contracted with PPL following the settlement reached on 13 November 2017 (as mentioned earlier) and impairment on certain recoverable amounts.
With all the borrowings under non-current liabilities of the Group as at 30 September 2017 being reclassified as current liabilities, the current liabilities of the Group ballooned from S$155.8 million as at 30 September 2016 to S$281.8 million as at 30 September 2017. Following from the above, the Group recorded:
Commentary On Current Year Prospects
Barring any unforeseen circumstances, the Company expects the implementation and completion of the Debt Restructuring Exercise to take place in the early part of 2018. As at the date of this announcement, the Company has achieved the following milestones in relation to the Debt Restructuring Exercise:
The last step towards the completion of the Debt Restructuring Exercise relates to the PT BBR Restructuring, which is expected to be concluded in early part of 2018.
When the Debt Restructuring Exercise is finally completed and implemented, and together with the injection of fresh funds from the Investment, which will provide additional working capital, the Group will be better positioned to move ahead, given its much improved financial position coupled with positive swings in recent oil prices. It is envisaged that the outlook of the Oil and Gas industry would be slow but steady, and the Group expects to move in tandem. Notwithstanding the improved conditions, the offshore market is expected to remain challenging in the next 12 months.
Some of the statements in this release constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. These forward-looking statements reflect our current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks and factors, such as general economic and business conditions, including the uncertainties of the pace of recovery of the United States of America economy, continued concerns of the scale of the possible adverse fallouts and their implications on the global scene triggered by the current Euro zone debt crisis, inflationary pressures and currency appreciation which will affect the continued strong growth in Asia, especially East Asia; timing or delay in signing, commencement, implementation and performance of programs, or the delivery of products or services under them; relationships with customers; competition; and ability to attract personnel. Because actual results could differ materially from our intentions, plans, expectations, assumptions and beliefs about the future and any negative impacts arising from these issues will affect the performance of the Group’s businesses, undue reliance must not be placed on these statements.