Neptune Marine Services has positioned itself for significant future growth after posting a normalized net profit after tax of $10.9m (1H08: $2.2m; 2H08: $8.7m) and maiden net profit after tax of $7.4m (1H08: $845k; 2H08: $6.55m) for the full year 2008.
The result effectively represents a $17 million turn around on the Company’s comparative FY07 financial performance and has it poised to take advantage of significant opportunities for growth across the international offshore oil and gas industry.
Revenue for the period totalled $86.7m (1H08: $31.7m; 2H08: $55m) representing a 560% increase on the comparative FY07 figure of $15.5 million. This was largely due to the significant levels in organic growth recorded across the group, supported by consistent growth from international acquisitions.
A successful capital raising project that generated $61m helped drive Neptune's expansion within Western Australia, as well into the investment rich regions of Europe (North Sea) and South East Asia. The project also funded Neptune's entry into the offshore support vessel and remotely operated vehicle (ROV) market, with the purchase of the 55 meter construction support vessel, the MV Neptune ROV Supporter, and the first three of Neptune's burgeoning ROV fleet.
Neptune's Managing Director and CEO, Christian Lange, said the period, and particularly the second half of the year, represented an important phase in the group's consolidation, strategic positioning and identification of significant international opportunities for growth.
"Following our encouraging normalized NPAT of $2.2 million in the first half of the year, we have almost quadrupled our effort to record an $8.7 million normalized NPAT in the second half," he explained. "This marked increase in activity is indicative of the future trend for the Neptune group that is embarking upon a major phase of growth that is being driven by a number of factors including a very buoyant subsea investment market in Australasia, our aggressive, proactive approach to bidding and tendering, an increase in repeat and extended contracts and greater industry recognition (globally) for our range of integrated engineering services.
"If you consider our current position as a guide, we already have confirmed contracts for 1H09 valued at more than $50 million. With this as a foundation, we can focus on consolidating our position within the market, fostering the integration of our business units and identifying future organic opportunities in line with our strategy for growth.
"The businesses that we have acquired this year continue to perform above expectation and consistently return high levels of growth. Complementing this expansion is the in-house expertise that we possess and will continue to nurture as we cultivate our future development potential."
At the local level, Lange said Neptune's expansion, particularly in the second half of the year, confirmed the effectiveness of the group's service model and emphasised the value that customers placed on partnering with a single provider of multiple services.
"The establishment of the Neptune Integrated Projects Group during 2H08 resulted in the successful execution of the Simpson Pipeline Replacement Project for Apache Energy offshore Western Australia," he said. Utilizing our full range of integrated services, the success of this project emphasised the significant time, cost and logistical efficiencies that can be realised from such a unique and comprehensive service offering," he added.
The Offshore Services Division returned full year revenue of $51.9 million, bolstered by the addition during the period of:
Engineering & Project Management Services
The Engineering & Project Management Services Division returned full year revenue of $34.8 million. A major highlight during the period was the winning and subsequent completion of phase one of Neptune's largest integrated services project to date, the $13 million Simpson Pipeline Replacement Project for Apache Energy that was administered by the Integrated Projects Group (IPG). Employing the full range of integrated services, the project (the second integrated project of the year) provided the industry with an insight into Neptune's service capabilities.
The Engineering and Project Management Services Division returned a significant rate of organic growth during the period -- a figure in the order of 43%, a strong indicator of successful integration and strategic development across the Neptune Marine group of companies.
"With our FY08 profit result and our confirmed work for 1H09 as a basis, Neptune Marine commences the new financial year in a very strong position," Lange revealed. "The operational capability and underlying profitability of the group grew significantly during 2H08 and current indicators suggest this trend will continue well into the future.
"All of our business units are winning new work and we are starting to see a shift towards projects that are much greater in scope and value and that deliver stable, recurring revenue over longer time frames. Concurrently our pipeline of future project opportunities is at a record level in line with the increased awareness of and demand for Neptune’s integrated services, particularly in the oil and gas industry.
"A major component in the efficient delivery of these services to the Australian market is the 70.05 meter DP2 anchor handling, tug and platform supply vessel, Nor Sea that we expect to take delivery of during 1H09, mid charter. Complementing both the Nor Sea and our recently acquired MV Neptune ROV Supporter are the three Swift XL work class ROVs that we have committed to and have secured work for corresponding to their staggered delivery," he added.
In order to benefit from this increase in activity and long term investment in the sector (conservatively valued at $17 billion over the next four years in Australasia alone), Lange said Neptune Marine would continue to focus on enhancing its proven integrated services strategy, fostering its high levels of organic growth, maintaining its strong cash flow position and remaining conservatively geared and profitable.
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