Chairman Message
Extracted from Annual Report 2011
Warm greetings,
On behalf of the Board of Directors, we are pleased to present to you the annual report for Ezion Holdings Limited for the financial year ended 31 December 2011 ("FY2011").
Change of Reporting Currency
You may wish to note that this is also our first year which we have changed the reporting currency from Singapore dollar to US dollar. We did this to align the reporting currency to the operating currency.
A Year of Continuous Favour
The Group enjoyed increased contribution from the charter of its fourth Liftboat in FY2011. Although the total revenue was lower by about nine percent as compared to FY2010 due mainly to the significantly lower contribution from non-recurring and non-chartering income, the gross profit increased by about 24% from US$44.7 million to US$55.3 million. The net profit increased by about 45% from US$40.2 million to US$58.1 million in the same corresponding period.
The Blessings Along The Year
Through a joint venture with Buccaneer Energy Limited, a Houston based company listed on the Australian Securities Exchange, we managed to secure a contract of approximately US$109.5 million to provide a jack-up rig to support oil & gas activities in Cook Inlet, Alaska for 5 years.
Through another joint venture with Treatmil Holdings Limited, the Group secured another contract in June 2011 with a value of up to US$73.0 million over a 4 year period to provide an accommodation jack-up rig to support a European oil major in its oil and gas work in offshore Denmark.
Closer to home, in November 2011, we successfully deployed a Liftboat in the Northwest Java Sea to carry out work for a Southeast Asian-based National Oil Company. The Group has also further secured a letter of intent for a second unit of Liftboat to work in the same area.
In addition to its current project in Gorgon, Northwest Australia, the Group secured its second major project in Australia in August 2011. The contract of US$55 million entails providing full logistics and support services for the haulage of equipment and modules for the development of LNG facilities on Curtis Island. This LNG project is the first of the eight proposed LNG facilities in Queensland, Australia and is expected to have an initial capacity of 7.6 million tonnes per annum (Mtpa).
We are also grateful that while we continue to strengthen the existing management team, we encountered minimal turnover in the staff movement along the year.
The Journey Ahead
According to the International Energy Agency, oil demand is projected to continue growing to about 105 million barrels per day by 2030 from the current demand of about 89 million barrels per day. At the same time, the offshore oil and gas industry continue to face the issue of the aging production platforms with close to 2000 offshore production platforms aged more than 20 years old that require maintenance and repair.
Oil and gas majors will continue to increase their maintenance capital expenditure as they aim to increase or maintain existing production levels. These increased activities will lead to increase demand for the Liftboats and Service Rigs owned by the Group.
It is reported in the International Business Times that Australia is expected to overtake Qatar as the world's top exporter of LNG by 2020. LNG projects are already being developed in the country at a cost of about US$180 billion. In the past 18 months or so, at least six have already started. All these projects will enable Australia to ramp up its LNG exports by four times over present rates by the end of this decade.
With the proven track record, the correct and relevant expertise and with its strong balance sheet, the Group is well prepared to meet the strong demand from the above. We will also continue to invest in strategic assets and leverage on our experience to capitalise on the opportunities presented.
Dividends
To reward our loyal shareholders, the Directors have recommended a final tax-exempt dividend of 0.10 Singapore cents per ordinary share, pending approval at the forthcoming Annual General Meeting.
In Appreciation
With a thankful and humble heart, we give God all the honour and glory for the blessings of the year. We also like to express our sincere gratitude to our fellow directors and all our colleagues for their advice, support and hard work. In addition, we also thank all our business associates, partners and bankers for their continuous support. We thank you for keeping faith in the company and we will continue to do our best to justify the confidence.
Mr Lee Kian Soo
Chairman
Mr Chew Thiam Keng
Chief Executive Officer