Corporate Profile | Chairman's Statement | Board Of Directors
Extracted from Annual Report 2015
Dear Valued Shareholders,
FY2015 has been a year of uncertainty. We have seen continued volatility in oil and gas prices during this period, and the industry has been rife with speculations amidst rationalisation, corporate mergers and acquisitions in these challenging times. However, we have implemented key initiatives to mitigate the effects of the downturn as much as possible.
Subsea Services Division
We have closed out FY2015 on some positive news - We have signed a binding share sale and subscription agreement with Japan's Chiyoda Corporation (“Chiyoda”) for Chiyoda to invest in Ezra's Subsea Services business, EMAS AMC, to form EMAS CHIYODA Subsea – a 50:50 joint venture. This joint venture will allow us to realise our vision of being a major player in the subsea construction business and enable us to undertake larger and more complex Engineering, Procurement, Construction and Installation (“EPCI”) projects, as well as full field developments, which combine onshore and offshore facilities. Chiyoda, a recognised global engineering company, will be able to lend tremendous support in many areas of our business operations, such as supply chain and project management. This is a very significant milestone for all of us here at the Ezra Group.
Our flagship vessel, Lewek Constellation, has successfully proven operationally our concept of portable reel-lay technology, completing two of her inaugural reel-lay projects with Noble Energy in the US Gulf of Mexico in September 2015. These projects are a testament of our engineering capabilities, and demonstrate our ability to develop efficient solutions and deliver them. We will continue to leverage our diverse project execution track record and technically advanced assets to actively pursue new projects such as our inaugural contract with global resource giant BHP Billiton for the Angostura phase three development, which is offshore Trinidad and Tobago.
Offshore Support and Production Services Division
The outlook for the offshore support services sector remains challenging. Notwithstanding, our offshore support vessels have achieved a utilisation rate of 75% for FY2015 and we continue to see relatively healthy demand for higher specifications vessels in the AHTS vessel segment. The division also garnered two awards – one for eight years of goal zero operations by Shell Philippines in recognition of our continued safe operations; the other is by Petronas called the June Peak Award for excellence in operations and maintenance metrics. These awards showcase our relentless focus on safe operations and quality delivery of projects. I am also pleased to note that the Production services arm saw a safe year without any Lost Time Incident (“LTI”).
Marine Services Division
TRIYARDS, our Marine Services Division, continues to outdo itself in its third year of listing. I am pleased to share that TRIYARDS has clinched two more liftboat contracts this year, and delivered two BH450 series of liftboats – a clear indication of their fabrication and engineering expertise, as well as demonstrating a strong demand for adoption of liftboats in the industry. As part of its diversification strategy, TRIYARDS has recently announced contract wins for the fabrication of chemical tankers, high speed crafts and industrial fabrication. TRIYARDS will continue to establish its reputation in the marine and industrial fabrication sector as well as other areas to steadily grow its income stream.
Marine Services Division
Our financial strategy and implementation have also yielded results – We have effectively reduced our gearing levels from 1.2x to 0.8x in the span of a year. We have also completed an initiative for the renounceable underwritten Rights Issue and with our shareholders' approval and support, achieved a subscription ratio of 1.3x. The gross proceeds of approximately S$200 million (US$150 million) from the issue of the rights have been primarily used to repay our fixed rate notes that were due in September 2015. The equity raised has strengthened the balance sheet of Ezra. We are also focused on pursuing other primary alternatives of capital raising initiatives, including the sale and leaseback of our key assets.
Finally, I request from you, our esteemed shareholders, your continued support of Ezra through these volatile times. Additionally, I would also like to extend my gratitude to the members of the Board, the management team and staff for their contributions throughout FY15.
Last but not least, let me take this opportunity to warmly welcome Mr. Tan Cher Liang onto the Ezra Board.
Together we deliver!
MR. KOH POH TIONG