Further, net profit stood at US$23.0 million or down slightly by 11.5% from US$26.0 million resulting lower net margin at 16.4% compared to last year's 23.3%. Lower net profit was mainly driven by higher interest expense incurred by the Company at US$10.1 million or up significantly by 146.3% from US$4.1 million due to the inclusion of Soehanah Financing of approximately US$125 million. Agustinus B. Lomboan, Apexindo's Finance Director explains," We are definitely on the right track wherein realization of significant contract achievements emerged in the second half this year. We expect strong growth next year that rigs with new contracts will be fully utilized. Essentially, we are always committed to maintain excellent growth of the Company to ensure strong financial performance throughout the years and produce strong profitability even though costs are unavoidably higher due to higher utilization rate and price inflation. In 3Q07, profitability went stronger as our EBITDA of US$68.6 million in third quarter this year has exceeded last year's full year EBITDA and we are close to book an EBITDA margin of 50%, which will put us among the drilling companies worldwide with excellent profitability. Our net profit of US$23.0 million and net margin of 16.4% were also real reflections of improved operational performance as distortions of foreign exchange movement have been reduced. While, we booked higher interest expense caused by the additional interest burden coming from the debt of Soehanah long term financing, however, with our strong level of EBITDA, our coverage still stood at approximately 6.8x, which means we still maintain excellent ability to service interests from our debts ".
As mentioned before, financing for Soehanah construction has been included in the balance sheet. This has pushed up interest bearing debts to US$199.4 million or up by 126.8% from US$87.9 million. "Although our debts went up significantly, we still manage to have our net gearing to be below 1.0x which was at 0.7x as we are able to preserve strong cash and equity level resulting from strong profitability. We will always be disciplined in maintaining the health of our balance sheet to ensure flexibility in formulating growth strategy to support our main goal, which is to provide the highest return possible to our shareholders", adds Agustinus.
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