Record Order Backlog for Ezra (Singapore)

Singapore’s Ezra Holdings, a contractor and provider of integrated offshore solutions to the oil and gas (O&G) industry, sees recovery of performance in 4QFY13 as EMAS AMC, Ezra’s Subsea Services business, establishes a solid operational foundation for the Group.
For the financial year ended 31 August 2013 (“FY13”), the Group posted revenue growth of 28% to US$1.26 billion from US$984.2 million in the previous corresponding period (“FY12”).

Fourth-quarter revenue in FY13 (“4QFY13”) also increased 28% to US$419.2 million from US$326.3 million in the same period last year (“4QFY12”).
The Group’s revenue growth was led by the Subsea Services division, which independently contributed US$236.0 million of the Group’s revenue increase of US$277.9 million for the financial year. The significant increase in the number and value of projects undertaken by EMAS AMC in FY13, in comparison to the previous year, were the main drivers for the revenue increase.

The Group’s Offshore Support Services (EMAS Marine) and Marine Services (which includes engineering and fabrication activities under TRIYARDS) divisions also recorded increases in revenue which in turn, contributed to the overall revenue growth.The growth in revenue contributed to the 62% jump in the Group’s 4QFY13 net profit  after tax to US$13.5 million from US$8.3 million in 4QFY12. In FY13, net profit after tax  stands at US$64.1 million, dipping slightly from US$66.0 million recorded in the previous year.

On the Group’s performance, Ezra’s Managing Director, Lionel Lee, said:  “Compared with the preceding quarter, we have rebounded  operationally. We have successfully laid the foundation for a new chapter of growth for the company and are already beginning to see the fruit of our labour with contract wins from major industry players for major projects in various parts of the world. Moving forward, we will continue to focus our energies on effective and prompt execution of our order book of more than US$2 billion worth of contracts.”
To position itself for the uptake in subsea activities, the Group added project-enabling assets Lewek Express and Lewek Centurion to its existing subsea fleet in 4QFY13, and has also boosted its project management and engineering teams. Such investments have pushed administrative expenses up in the past few quarters, and any future increase is expected to be moderate. However, these investments in assets and capabilities have been recognised by the offshore oil and gas industry, with an increase in the number of projects undertaken and a significant increase in value of  contracts awarded. In FY13, the Group has won subsea contracts worth in excess of  US$1.4 billion.

Going forward, the Group expects to benefit from improved economies of scale and  associated benefits to margins as it ramps up project activity utilising the core business infrastructure that has been put in place in FY13.

Ezra has also continued to strengthen its capabilities to service the growing demand  for offshore and marine services in Southeast Asia. EMAS Marine, added the newly delivered offshore support vessels Lewek Teal, Lewek Avior and Lewek Alkaid to its  existing fleet in FY13. The division has also added to its management team and  focused on improving vessel management in FY13, and its strategy going forward will  be to maintain a high rate of overall deployment in key regions within South East Asia,  as demonstrated by its contract awards for charters during the year. The  division is  also looking to further strengthen its management team in the coming new year.

TRIYARDS has achieved a new milestone in FY13 with the launch of its newly  designed Premium Class 400 HPHT (high pressure, high temperature) Drilling Jack-up Rig, the TDU-400, making it one of the only three Singapore yards to design and build its own proprietary drilling jack-ups and Self Elevating Units (SEUs). TRIYARDS also introduced its new proprietary-designed third generation SEU, the TSU 475. The TSU 475 is a high specification SEU, with leg lengths of nearly 110m (475 feet). It can operate in water depths of almost 110m (350 feet) and can accommodate up to 320 personnel. It is DP-2, self-propelled with speeds of up to seven knots, comes with heavy lift equipment, and is able to execute a variety of platform servicing operations such as repair and maintenance, well intervention and servicing, and crew accommodation.

On the prospects for the coming year, Lee noted: “With diminishing energy supplies from conventional onshore sources, capital expenditures by energy majors in the offshore subsea services sector is expected to remain firm. I believe our foothold in the global subsea sector will be “fast-tracked” with our increased assets and capabilities.
“The Group’s order backlog reached a record high in FY13 and with approximately US$8 billion worth of projects being tendered, I am excited and anticipative of Ezra’s long term prospects. We have also not neglected our traditional areas of strengths, consolidating EMAS Marine activities in the region, winning good charters and maintaining a high vessel utilisation rate. Furthermore, TRIYARDS has done well in its first year as a listed company, expanding its products and services offerings, and winning a number of SEU orders.

“I want to thank our shareholders and stakeholders for being patient with us as we grew the business during the last three years. Barring any unforeseen circumstances, I am fairly optimistic about the prospects for FY14.

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Press Release, October 25, 2013