Financial Statements And Dividends Announcement For The First Quarter Ended 31 March 2012
Financials Archive
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Consolidated Statements of Comprehensive Income
Statements of Financial Position
Review of Group Performance
Consolidated Statements of Comprehensive Income
Revenue
The Group's revenues were derived from services provided to the subsidiaries of Swiber Holdings Limited (related companies), related parties as well as third party customers. The table below sets out the breakdown of the revenue by customers for the financial periods presented:
1Q2012 vs 1Q2011
The Group's revenue for 1Q2012 increased by approximately US$22.5 million or 86.0% from US$26.1 million in 1Q2011 to US$48.6 million in 1Q2012, which was due mainly to the increase in revenue from third party customers and related parties.
Cost of sales and gross profit margin
The Group's cost of sales comprises mainly the cost of project material/consumables, salaries and related expenses for offshore personnel, vessel chartering and equipment rental.
1Q2012 vs 1Q2011
The Group's cost of sales for 1Q2012 increased by approximately US$16.6 million or 99.9% from US$16.7 million in 1Q2011 to US$33.3 million in 1Q2012.
The increase in cost of sales was due mainly to the increases in the salaries of offshore personnel and chartering expenses. Gross profit margin decreased from 36.2% in 1Q2011 to 31.4% in 1Q2012, which was due to high sub-contracting costs including vessel chartering expenses incurred in 1Q2012 as compared to 1Q2011.
Administrative expenses
The Group's administrative expenses comprise mainly salary related costs of onshore personnel, management fee expense, office rental and its related expenses.
1Q2012 vs 1Q2011
The Group's administrative expenses for 1Q2012 increased by approximately US$0.6 million or 36.6% from US$1.7 million in 1Q2011 to US$2.3 million in 1Q2012, which was due mainly to an increase in number of operational and administrative personnel to support the expansion of the Group's operations.
Other operating expenses
The Group's other operating expenses comprise mainly foreign exchange losses and bank charges.
1Q2012 vs 1Q2011
The Group's other operating expenses for 1Q2012 increased by approximately US$0.3 million from US$0.1 million in 1Q2011 to US$0.4 million in 1Q2012, which was due mainly to an increase in foreign exchange losses as a result of depreciation of the US$ against the S$ in 1Q2012 as compared to 1Q2011.
Income tax expense and income tax payable
1Q2012 vs 1Q2011
The Group's income tax expense for 1Q2012 increased by approximately US$0.4 million or 21.6% from US$1.6 million in 1Q2011 to US$2.0 million in 1Q2012.
The increase in income tax expense was due mainly to the increase in the Group's profit before tax in 1Q2012 as compared to 1Q2011.
Correspondingly, this has led to an increase in income tax payable from US$3.7 million as at 31 December 2011 to US$5.7 million as at 31 March 2012.
Net profit margin
The Group's net profit margin for 1Q2012 was generally in line with its net profit margin for 1Q2011 recording a marginal decrease from 21.9% in 1Q2011 to 21.2% in 1Q2012.
Statements of Financial Positions
Trade receivables
Trade receivables increased by approximately US$22.8 million from US$95.0 million as at 31 December 2011 to US$117.8 million as at 31 March 2012. The increase was due to the increase in revenue in 1Q2012.
The breakdown between billed and unbilled portions is as follows:
The trade receivables turnover days had increased by 92 days from 99 days in 1Q2011 to 191 days in 1Q2012. The calculation of trade receivables turnover days excluded amounts due from related companies and related parties. The Group has carefully assessed the trade receivables and is of the view that they remain healthy and collectible.
Other receivables and prepayments
The breakdown of other receivables and prepayments is as follows:
The decrease in other receivables and prepayment was due mainly to the settlement of intercompany balances by the holding and related companies in 1Q2012.
Plant and equipment
Plant and equipment decreased by approximately US$1.5 million from US$89.4 million as at 31 December 2011 to US$87.9 million as at 31 March 2012. The decrease was due mainly to the recognition of depreciation expenses incurred on plant and equipment in 1Q2012.
Loans (Current and Non-current)
Loans decreased by approximately US$1.5 million from US$25.3 million as at 31 December 2011 to US$23.8 million as at 31 March 2012. The decrease in loans balance was due to the repayment of loans in 1Q2012.
Trade payables
The Group's trade payables increased by approximately US$4.5 million from US$39.1 million as at 31 December 2011 to US$43.6 million as at 31 March 2012. The increase was consistent with the increased business activities of the Group.
The trade payables turnover days increased by 57 days from 35 days in 1Q2011 to 92 days in 1Q2012. The calculation of trade payables turnover days excluded amounts due to related companies and related parties.
Other payables and accruals
The breakdown of other payables and accruals is as follows:
The Group's other payables and accruals increased by approximately US$5.7 million from US$26.4 million as at 31 December 2011 to US$32.1 million as at 31 March 2012. The increase was in line with the increased business activities of the Group.
Finance leases (Current and Non-current)
The Group's finance leases decreased by approximately US$0.4 million from US$4.8 million as at 31 December 2011 to US$4.4 million as at 31 March 2012 due to repayment of finance leases in 1Q2012.
Consolidated Statements of Cash Flows
1Q2012
Cash flow from operating activities
In 1Q2012, the Group's net cash from operating activities amounted to approximately US$7.4 million. This comprised mainly operating cash inflow before working capital change of US$14.1 million, adjusted for net working capital outflow of US$6.5 million and payment for interest and income tax of US$0.2 million.
The net working capital outflow of US$6.5 million was mainly the result of an increase in trade receivables of US$22.8 million, partially offset by the following:
- a decrease in other receivables and prepayments of US$6.1 million;
- an increase in trade payables of US$4.5 million; and
- an increase in other payables and accruals of US$5.7 million.
Cash flow used in financing activities
In 1Q2012, the Group recorded a net cash outflow from financing activities of approximately US$2.0 million, due to the repayment of loans and finance leases.
Cash and cash equivalents
In 1Q2012, the increase in cash and cash equivalents of approximately US$5.4 million was due mainly to the cash generated from operating activities, partially offset by the repayment of loans and finance leases.
1Q2011
Cash flow used in operating activities
In 1Q2011, the Group's cash used in operating activities approximated US$5.6 million. This comprised operating cash flow before working capital change of US$8.6 million, adjusted for net working capital outflow of US$14.6 million, and net inflow of interest payment and tax refund of US$0.4 million.
The net working capital outflow of US$14.6 million was mainly due to an increase in trade receivables of US$21.6 million, partially offset by the following:
- a decrease in other receivables and prepayments of US$3.7 million;
- an increase in trade payables of US$0.7 million; and
- an increase in other payable and accruals of US$2.5 million.
Cash flow from financing activities
In 1Q2011, the Group recorded a net cash inflow from financing activities of approximately US$1.6 million, which was due mainly to the new loan raised during 1Q2011, offset by repayment of loans.
Cash and cash equivalents
In 1Q2011, the decrease of cash and cash equivalents by approximately US$4.0 million was due mainly to the funding for working capital and loans repayments, partially offset by the cash inflow from a new loan raised.
Commentary
The offshore oil and gas industry in Asia continues to remain active as a result of oil prices holding at reasonable levels and oil and gas majors moving ahead with their expansion and growth. We shall continue to capitalise on this trend.
In April 2012, the Company completed a share placement, increasing the public float of the Company to approximately 26.5%. The net proceeds raised by the Company are largely intended for the Group's capital expenditure such as the acquisition of assets including vessels and/or other subsea related assets.
The Group recently acquired a Dynamic Positioned ("DP"), construction class Diving Support Vessel ("DSV") for enhancing its subsea capabilities in offshore construction and installation projects, as well as reducing reliance on rental of third party assets. Moving forward, Kreuz will have more certainty on the availability of assets to carry out its projects.
The Group has a current order book of approximately US$120 million and has submitted bids for several target projects.
Due to the project-based nature of the Group's business, the revenue contribution from our customers may vary from quarter to quarter, depending on the size and scope of the projects and their completion schedules.