Apexindo's EBITDA Rose Significantly in 3Q 2007

PT Apexindo Pratama Duta Tbk based on unaudited third quarter 2007 financial statement booked a significantly higher EBITDA of US$68.6 million or up by 43.8% compared to US$47.7 million from re-measured September 30, 2006 financial statement. The increase on profitability was backed by better growth, which was reflected in improved revenue from US$111.8 million to US$140.0 million this year or up by 25.2%, as well as well managed costs. EBITDA margin went up to 49.0% compared to last year's 42.7%. Gross and operating margin also improved that were booked at 39.3% and 34.9% respectively in 3Q07. This year, onshore segment contributed US$49.9 million of revenue or grew 30.3% YoY from US$38.3 million as onshore utilization rate surged to the highest rate since 2002 at 75% backed by new contract achievements with upward dayrate adjustments as well as longer contract durations. Meanwhile, offshore segment remained the largest revenue contributor wherein it produced 22.5% higher contribution from last year's USD 73.5 million to USD 90.1 million or 64.3% out of total revenue in 3Q07 on the back of significantly higher rates in Maera extension that started August this year as well as the inclusion of revenue from the first project of newbuild Jack up Soehanah with Total in East Kalimantan. While, offshore utilization rate actually dropped from 100% last year to 83% in 3Q07 due to the drydocking of Jack up Raniworo from February to May this year and late delivery of new Jack up Soehanah from the shipyard, which eventually started its project with Total at the end of May 2007.

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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