Swiber Sails Out of Second Quarter with Record Offshore Earnings
Swiber Holdings Limited continues to sail strongly ahead on the offshore oil and gas boom. The Group reported earnings of USD$22.2 million for the three months ended June 30, 2008 (2QFY08), up 258.1% from a year ago.
The impressive bottomline improvement came as Swiber's revenue surged 391.1% to US$124.5 million in 2Q08 from the continued onslaught of offshore construction projects. Of significance, the Group's Swiber posts 2QFY08 results revenue for the three months under review is already more than 80% of the revenue it achieved for the 12 months in fiscal year 2007, which amounted to US$151.2 million.
The Group's year-to-date performance was equally outstanding. For the six months ended June 30, 2008 (1HFY08), Swiber reported revenue and earnings of US$195.4 million and US$32.6 million respectively, up 337.4% and 230.8 % from 1HFY07.
With the latest 1HFY2008, earnings per share was boosted to 7.33US cents, from 2.69 US cents a year ago, based on 424,350,000 and 369,000,000 weighted average ordinary shares in issue, respectively. Net asset value per share rose to 50.16 US cents as at June 30, 2008, compared to 41.68 US cents as at December 31, 2007.
Commenting on its latest results, Swiber’s Executive Chairman and Group Chief Executive Officer, Raymond Goh, said, "Swiber has expanded in size and scale of operations substantially from a year ago. We have more vessels, more regional offices set up and a much stronger reputation -- all these have allowed us to take on more projects. In 2QFY08, we performed six offshore construction projects simultaneously in Malaysia, Brunei and Indonesia, as compared to just two in Malaysia and Brunei in the corresponding period last year. These jobs comprised mainly transportation and installation of offshore pipelines and platforms."
Profitability remained very healthy in 2QFY08 with the Group raking in a gross profit of US$32.3 million, up 333.2% from 2QFY07. The higher gross profit achieved in 2QFY08 was marginally offset by a 126.1% rise in administrative expenses to US$6.9 million.
With yet another successful quarter behind them, Swiber is busy staging its next phase of growth. As at 30 June 2008, the Group has a hefty order book of US$664 million, versus approximately US$220 million in June 2007, and US$350 million in February 2008. This includes the 5-year conditional Letter of Intent from CUEL Limited for the installation of pipelines and platforms in the Gulf of Thailand at an estimated value of US$50 million a year.
The Group expects offshore oil and gas activities to remain buoyant for the next 12 months, and intends to leverage on its expanded fleet to tap on this sea of opportunities.
"Our sector outlook is looking quite positive with global offshore spend expected to grow from US$254 billion in 2007, to US$361 billion in 20121. And Swiber expects to tap into this buoyant market through our fleet expansion program. In particular, the increase in our construction vessel fleet from 5 to 8 by end of FY08 is expected to significantly boost our capabilities to bid for new projects and build up our order book. It will also allow us to expand geographically," elaborated Goh.
Swiber has a total fleet of 30 vessels to]date, up from 28 vessels in the first quarter of 2008, and expects its armada to expand further to 39 by the end of 2008 and 48 by end of 2009.
The Group also intends to scale up its business and expand its geographical presence through strategic
alliances with suitable partners.
Such alliances include an MOU with Thailand’s CUEL Limited in April 2008 for both companies to jointly pursue offshore EPCIC projects in the Asia Pacific region; and a cooperation agreement with state-linked company Vietsovpetro in September 2007 to mutually develop and strengthen each party’s position in the oil and gas industry in Vietnam and overseas.
Said Goh, "Expanding our geographic presence is very important to us. Where we can, Swiber will establish a direct presence to break into a market. Or we may go in via strategic partnerships, which have been a successful strategy for us as evident from our US$250 million CUEL project and the clinching of our maiden project in Vietnam in July this year."
Barring any unforeseen circumstances, the Group expects to remain profitable for its financial year ending December 31, 2008.
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