Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Chairman Message

Email This Print This

Extracted from Annual Report 2016


Grace and peace to all.

On behalf of the Board of Directors, we are pleased to present to you the annual report for Ezion Holdings Limited (the "Company") in respect of the financial year ended 31 December 2016 ("FY2016").


There has not been a significant improvement in the overall operating environment even though fuel prices have improved over the last few months and Brent Crude, for example, has stayed above US$50 per barrel since late 2016. The stability in prices has helped Exploration & Production companies broadly but there appears to be no significant adjustment yet to the corresponding operating budget of these companies. Against this backdrop, we expect the headwind to persist for the large part of FY2017 for companies that are mainly involved in the provision of assets and services to the offshore oil and gas industry such as ours. Across the industry, asset and service providers continue to suffer from slow payments from clients on the one hand, and obtaining acceptable credit terms from their respective suppliers on the other.

The revenue of the Company and its subsidiaries (the "Group") for FY2016 decreased by 9.4% to US$318.2 million. The Group made impairment losses on plant and equipment and provision for trade receivables of US$70.9 million, bringing accumulated impairment losses since FY2015 to US$152.0 million. In addition, the Group also registered a loss of US$2.0 million due to the results of associates and jointly controlled entities mainly for provisions taken during the year by these companies. As a result, we incurred a loss of US$33.6 million for full year 2016. The Group generated US$148.6 million of operating cash flows during the year. The current shareholder's fund as at the end of FY2016 was US$1.32 billion.


In the third quarter of 2016, with the support of DBS Bank Limited, Maybank Kim Eng Securities Pte. Ltd. and United Overseas Bank Limited, the Group successfully completed a rights issue of 478,576,422 new ordinary shares in the capital of the Company (the "Rights Issue"). The proceeds from the Rights Issue strengthened our Balance Sheet by US$99.8 million, and facilitated the Group in its efforts to fit out and re-purpose our fleet to enhance their operational flexibility to cater for different contracts going forward, thus providing greater resilience for the Group under different market conditions.

With the support of all our bankers, the Group was able to reduce its net annual principal repayment to match the Group's operating cash flows. In addition, the Group has also successfully renewed its working capital facilities with all its principal bankers.

We have also reviewed our financial position and decided that it is in the best interest of the Group to indefinitely postpone the delivery of 4 units of Service Rigs amidst the continued challenges faced by the industry as well as our clients.

The cost cutting measures that we have implemented across the entire Group some time ago and the cost structures within the Group are constantly being monitored to maintain our competitiveness.


The Group continues to focus on its strategies outlined in 2015, whilst constantly developing its key business areas in support of customers in the Oil and Gas industry. In respect of the offshore windfarm markets in China and Europe, we formally entered the China offshore wind farm market through the establishment of a joint venture company, Sinomarine & Teras (Tianjin) Offshore Co. Ltd., with Shanghai Changhang Shipping Co. Ltd. During the year, the Group successfully redeployed one of our Service Rigs to support the offshore wind farm activities in Europe. We will continue to explore opportunities in this new business segment and we expect at least two more units will be redeployed within this year into this industry with special focus on the offshore sector in China.

We have also set up a new joint venture company in Indonesia with a local partner to fortify our relationship with one of our existing clients through the provision of a new asset. We will continue to explore more tie ups and joint ventures with strategic partners to more efficiently meet the demands of our clients.

The Group is working closely with our bankers and several government agencies for the modification, upgrade and redeployment of our existing fleet of Service Rigs to support our customers in the Oil and Gas industry. We have secured new contracts in the Middle East and expect a few of our units to commence work there within 2Q-3Q FY2017. We are also in discussions with clients within South East Asia to modify our units to support their long term requirements, and these could potentially include the conversion and deployment of Mobile Offshore Production Units.

Most critically, the Group will be focusing on matching its cash flow with the capital expenditure that is required to fulfill its obligation to its customers. We continue to believe that a strong balance sheet and conservation of cash will best serve the interest of the Group and its shareholders, and as such have decided not to declare a dividend for FY2016.


We thank you, God almighty, with all our hearts. We are eternally grateful for the peace and refuge that you have granted.

We are grateful to our fellow directors for their continued guidance and support. We are deeply appreciative of the pressures endured by the management and staff in these trying times as well as their unwavering hard work and dedication.

To our bankers, we thank you for standing by us amidst the challenges currently facing our industry and we are truly grateful.

To our business associates and partners, we hope to weather this storm together through closer collaboration and dialogue. We have confidence that with your support we will sail through the storm together.

We are also thankful for the Government's various efforts and schemes in providing financial support and relief to companies in our industry, and in particular to International Enterprise Singapore for their continuous support.

Last but not least, to our dear shareholders, we thank you for your continuous support.

The grace of our Lord be with your spirit.

Dr Wang Kai Yuen

Mr Chew Thiam Keng
Chief Executive Officer

Please read our General Disclaimer & Warning carefully. Use of this Website constitutes acceptance of the Terms of Website Use.
Copyright © 2018. All Rights Reserved.