ANALYST BRIEFING Q4 FY2012 Financial Results & Updates Updated - - PowerPoint PPT Presentation

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ANALYST BRIEFING

Q4 FY2012 Financial Results & Updates

Updated as at 26 February 2013

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CONTENTS

About Deleum Business Activities Highlights for the Year Financial Highlights

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ABOUT DELEUM

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CORPORATE STATEMENT

To Provide Sustainable Growth and Enhance Stakeholders’ Value MISSION VISION To be the Market Leader in

• ur

Operating Segments domestically and to establish regional presence by 2015 SHARED VALUES Integrity

Respect, Honesty, Ethics.

Professionalism

Accountability, Teamwork, Communication.

Health, Safety & Environment

Healthy/Balanced Lifestyle, Safety, Environment.

Excellence

Quality, Deliverance, Rewards.

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ABOUT DELEUM

• Deleum Services Sdn. Bhd. (formerly known as

Delcom Services Sdn. Bhd. ) – est. in 1982

• PETRONAS licensed
• Long-term relationship with OEMs (> 20 years)
• Provides diverse range of specialised supporting

products and services for the Oil and Gas Industry

• Relationships – Agency, JV and Self Operated
• Group strength – approx. 585 employees

Kemaman Supply Base, Kemaman Deleum Branch Office, Miri Asian Supply Base,Labuan Workshop Facilities, Miri Penaga Dresser, Kemaman Solar Turbines Integrated Overhaul Facility,Senawang Deleum Rotary Services,Kajang Deleum Head Office Deleum Primera, Sg Besi

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BOARD OF DIRECTORS

Nan Yusri Bin Nan Rahimy Group Managing Director Chin Kwai Yoong Independent Non-Executive Director Lt General (R) Tan Sri Dato’ Seri Abdul Ghani Bin Abdul Aziz Non-Independent Non-Executive Director Dato’ Kamaruddin Bin Ahmad Independent Non-Executive Director Datuk Ishak Bin Imam Abas Independent Non-Executive Director Datuk Vivekananthan a/l

• M. V. Nathan

Deputy Chairman Dato’ Izham Bin Mahmud Chairman

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CORPORATE PROFILE

Deleum Berhad Profile Deleum Berhad (Bursa: Deleum) is an investment holding company and through its subsidiaries, provides a diverse range of supporting specialised products and services for the oil and gas industry, particularly the exploration and production of oil and gas.

• Nan Yusri bin Nan

Rahimy Group Managing Director

• Zamani Abd Ghani

Group Chief Operating Officer

• Heng Phok Wee

Chief Operating Officer Deleum Services Sdn. Bhd.

• Ahmad Uzhir bin Khalid

Chief Operating Officer Deleum Oilfield Services

• Sdn. Bhd.
• Khairiri Abd Karim

Chief Operating Officer Deleum Rotary Services Sdn. Bhd.

• Lee Sew Bee

Senior General Manager Corporate Services

• Jayanthi Gunaratnam

Senior General Manager Finance, Administration & Procurement Key Management Team Historical Price / Volume Chart (as at 26/02/2013) Current Share Price (as at 26/02/13) RM1.90 Issued and Paid Up Capital 150 Million Market Capitalisation (as at 26/02/13) RM285 Million Shareholders Equity as at 31 December 2012 RM215 Million Net Cash as at 31 December 2012 RM61.8 Million Market Data

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MILESTONES ACCOMPLISHED

1982 1982 1982 1982 1985 1985 1985 1985 1990 1990 1990 1990 1995 1995 1995 1995 2000 2000 2000 2000 2005 2005 2005 2005 2010 2010 2010 2010 2012 2012 2012 2012

(1982) Establishment of Deleum Services Sdn. Bhd. (DSSB) (formerly known as Delcom Services Sdn. Bhd.) (1999) Camco Inc acquired by Schlumberger (2010) Acquisition of Deleum Rotary Services Sdn. Bhd. (formerly known as Rotary Technical Services

• Sdn. Bhd.) (DSSB’s wholly owned subsidiary)

(2007) Listed on Main Market Bursa Malaysia via investment holding entity Deleum Berhad (2008) Establishment of Turbine Overhaul Facility

• Dedicated Solar Turbines Integrated Service Centre

Acquisition of 51% equity interest of Penaga Dresser

• Sdn. Bhd. via 80% subsidiary Delcom Holdings Sdn. Bhd.

(1987) Establishment of Turboservices Sdn. Bhd. (TSSB)

• JV with Solar Turbines Inc. (After Market Sales

for Gas Turbines) Establishment of Camco (Malaysia) Sdn. Bhd. (CMSB)

• JV with Camco Inc.(Wireline & Completion

Services) (2001) DSSB’s 49% acquisition of CMSB from Schlumberger and assumed its current name of Deleum Oilfield Services

• Sdn. Bhd. (formerly known as Delcom Oilfield Services
• Sdn. Bhd.) (DSSB’s wholly owned subsidiary)

(2012) 30th Anniversary & Corporate Rebranding Acquisition of 60% equity interest in Deleum Primera Sdn. Bhd. (formerly known as Northern Primera Sdn. Bhd.)

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Deleum Services Sdn. Bhd. 100% (formerly known as Delcom Services Sdn. Bhd.) Delflow Solutions Sdn. Bhd. 100% Turboservices Overhaul

• Sdn. Bhd.

100% Deleum Services Holdings Limited 100% (formerly known as Delcom Services Holdings Limited) Deleum Oilfield Services Sdn. Bhd. 100% (formerly known as Delcom Oilfield Services

• Sdn. Bhd.)

Deleum Chemicals Sdn. Bhd. 100% (formerly known as Delcom Chemicals Sdn .Bhd.) VSM Technology Sdn. Bhd. 90% Wisteria Sdn. Bhd. 100% SledgeHammer Malaysia Sdn. Bhd. 100% Deleum Rotary Services Sdn. Bhd. 100% (formerly known as Rotary Technical Services

• Sdn. Bhd.)

Turboservices Sdn. Bhd. 74% Delcom Holdings Sdn. Bhd. 80% Penaga Dresser Sdn. Bhd. 51% Malaysian Mud And Chemicals Sdn. Bhd. 32% Delcom Power (Cambodia) Limited 60% Delcom Utilities (Cambodia) Limited 60% Cambodia Utilities

• Pte. Ltd.

20% Deleum Primera Sdn Bhd 60% (formerly known as Northern Primera

• Sdn. Bhd.)

GROUP CORPORATE STRUCTURE

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BUSINESS ACTIVITIES

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Oilfield Services Maintenance, Repair and Overhaul Power and Machinery

CORE BUSINESS SEGMENTS

POWER AND MACHINERY

• Provision of gas turbine

packages

• Supply of gas turbines parts,
• Gas turbine overhaul,

maintenance and technical services

• Combined heat and power

plant

• Supply, repair, maintenance

and installation of valves and flow regulators

• Other production related

equipment services OILFIELD SERVICES

• Provision of wireline

equipment and services

• Integrated wellhead

maintenance services

• Provision of oilfield

chemicals

• Other oilfield products

and technical services MAINTENANCE, REPAIR AND OVERHAUL

• Repair, servicing, maintenance and overhaul of motors, generators,

transformers, pumps

• Integrated corrosion, inspection and mitigation for surface preparation
• Composite repair and structural integrity

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BUSINESS ACTIVITIES

POWER AND MACHINERY

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POWER AND MACHINERY

We possess the capability to supply: complete life cycle support of gas turbine generators and compressor packages

• Approximately

250 gas turbine packages installed Turnkey / EPCC solutions

• CHP plants – Malaysian Mosaic Limited

& Muda Paper Mill, Petronas Fertiliser

• District cooling plant – KLCC, UTP

, Putrajaya Total life cycle support of valves and flow regulators Provision of umbilical, piping insulation solutions and mooring system Provision of floating production systems

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INTEGRATED SERVICES CENTRE

Invested plant and equipment > RM 20 mil Sitting on 3.5 acres site (30k sqft built-up area) Equipped with advanced simulators and training skids Capabilities

• Turbine overhaul
• Component repair & remanufacture
• Stocking
• Retrofits
• Training
• Regional turbine packages

POWER AND MACHINERY (Cont’d)

OILFIELD SERVICES

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OILFIELD SERVICES

Deleum’s Oilfield Services segment specialises mainly in upstream operations, topside and downhole support services consisted of the following: Provision of wireline equipment and logging services Completion services Integrated wellhead maintenance services Oilfield chemical Other oilfield products and technical services Decommissioning of platforms and wells

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OILFIELD SERVICES

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SPECIALTY CHEMICALS

OILFIELD SERVICES (Cont’d)

Signed Joint Commercialisation Agreement with PETRONAS to jointly undertake commercialisation activities in respect of the thermo-chemical solution, SolidClenz™ (formerly referred as SDTT)

• n 3 November 2011

SolidClenz™ - a thermo-chemical solution for

• rganic deposit treatment in and around wellbore

for production enhancement New Development Subsequent to the success, more solutions were developed, as follows:

• Del-Clean – to dissolve and disperse inorganic

scale along with organic deposits

• Antifoulant GP/HX – for online chemical

treatment in crude or gas processing units

MAINTENANCE, REPAIR AND OVERHAUL (MRO)

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MAINTENANCE, REPAIR AND OVERHAUL

• Primary Focus:

Servicing, repair and maintenance of motors, generators, transformers, pumps, valves (via Deleum Rotary Services Sdn. Bhd.) Integrated corrosion, inspection and mitigation for surface preparation (via Deleum Primera Sdn. Bhd.) Composite repair integrity for pipeline and structure for

• il and gas as well as general industries. (via Deleum

Rotary Services Sdn. Bhd.)

• IECEx certified from Simtars, Australia
• Expertise/ Capabilities
• Repair, services & maintenance
• Motors
• Genset, transformers, etc
• Electrical generation & transmission equipment
• Service & repairs for rotating equipment
• Engineering & design capabilities
• Turnkey/ Integrated maintenance service
• Service Facilities – Kajang, Pasir Gudang

RECOGNITIONS AND AWARDS

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AWARDS FOR YEAR 2012

Best Contractor Performance SCM – Contractors Management Sharing Session 23 May 2012 Shell Goal Zero Award Achieving 1,620 days without any recordable accident 8 June 2012 PCSB SBO/SKO Contractors Senior Management HSE Forum Q2 FY 2012 25 June 2012

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AWARDS FOR YEAR 2012 (Cont’d)

“Most Active Carigali Behavioral Safety” Reporter PCSB SBO/SKO Contractors Senior Management HSE Forum 25 June 2012 Certificate of Appreciation “SWI 1 Million Manhours without LTI” 16 July 2012

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CERTIFICATIONS OBTAINED DURING YEAR 2012

International Electrotechnical Commission Explosive (IECEX) Certification Deleum Rotary Services Sdn. Bhd. 24 April 2012 Competence Management System Deleum Oilfield Services Sdn. Bhd. 18 January 2012

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HIGHLIGHTS FOR THE YEAR

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HIGHLIGHTS OF THE YEAR 2012

Attainment of OPITO - Competence Management System Certification (OPITO-CMS) Deleum Oilfield Service Sdn Bhd (DOSSB) was accorded an outright approval from OPITO on the Competence Management System in January 2012 First wireline company in Asia which received such recognition and certification Competence Management System (CMS)

• A set of standards defining the competences

which apply to particular job roles

• Defines how a task is performed and the

necessary underpinning knowledge and understanding required to deal with any unexpected circumstances which could arise

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HIGHLIGHTS OF THE YEAR 2012

Development of the Training Well Facility Following the attainment of OPITO-CMS, DOSSB had successfully commissioned the first Training Well Facility at Asian Supply Base in Labuan, Malaysia Serves as a training platform providing simulated work environment The Training Well Facility is also made available to external parties for training, testing and etc Group’s commitments:

• To ensure workforce’s competency &

safety

• To provide quality service to all customers

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HIGHLIGHTS OF THE YEAR 2012

1 For 2 Bonus Issue

Increase the capital base of Deleum to a level which will better reflect the Deleum Group’s current scale of operations. Reward to shareholders for their continuous support to the Deleum Group. To increase liquidity of the Deleum shares. Market capitalisation has increased from RM143 million (15/03/2012) to RM268 million (21/02/2013).

30th Anniversary and Corporate Rebranding

In conjunction with the Group’s 30th Anniversary, Deleum consolidated its business focus under a single corporate identity. The subsidiaries have been rebranded as follows:

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HIGHLIGHTS OF THE YEAR 2012

Deleum Primera is involved in providing services in integrated corrosion, inspection and mitigation, primarily using Sponge-Jet products. The acquisition was completed on 5 October 2012. Accordingly, Deleum Primera is now a 60% owned subsidiary

• f the Group.

Rationale of the Acquisition: Provides another another revenue stream for the Deleum Group Synergises with the Deleum Group’s business as Deleum Primera’s existing customers are mainly the targeted customers of the MRO segment Expansion of MRO’s segment’s scope of services Provides a gateway for Deleum Group to venture into Indonesia market

Acquisition of Deleum Primera Sdn. Bhd. (“Deleum Primera”)

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HIGHLIGHTS OF THE YEAR 2012

Revamped Website

Deleum is committed to continuously improving the way we communicate with our stakeholders. The website has been redeveloped to provide a more detailed, relevant, interactive and accessible site. The new site features a fresh design, focused on delivering information pertaining to

• ur products and services in easy to navigate, user-friendly features which are broadly

classified into six sections: Corporate Information Core Businesses

• Investor Relations
• Media
• Events
• Careers

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DIVIDEND

Dividend Policy Deleum’s dividend policy is of distributing gross dividend of 50% of the Group’s annual profit attributable to the equity holders of the Company, subject to the availability of adequate distributable reserves, operating cash flow requirements, financial commitments, expansion plans and other relevant factors.

11.0 12.0 11.5 14.0 15.0 47% 45% 49% 48% 50.6% 0% 10% 20% 30% 40% 50% 60% 0.0 5.0 10.0 15.0 20.0 25.0 2008 2009 2010 2011 2012 (unaudited) Dividend Payout Ratio (%) Dividend Per Share (Sen) Dividend Per Share (Sen) Dividend Payout Ratio (%)

Year ended 31 December FY2011 FY2012 First interim (sen) 5 5 Second interim (sen) 9 10 Total dividend payout per share (sen) 14 15 Total share capital (no. of shares) 100,000,000 150,000,000 Total dividend payout / dividend declared RM14,000,000 RM22,500,000 Dividend Payout History Comparison of Dividend Payout for FY2011 Vs Dividend Payout/Declared for FY2012

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RECENT CORPORATE DEVELOPMENT

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RECENT CORPORATE DEVELOPMENT

Potential Subscription of equity interest in NSE Resources Corporation (M) Sdn Bhd (“NSERC”)

Deleum has accepted an offer from NSERC for Deleum to subscribe a percentage equity interest in NSERC. The principal activities of NSERC Group are in the provision of specialty chemicals and renewable energy. The Potential Subscription is currently undergoing the necessary due diligence review

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FINANCIAL HIGHLIGHTS

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FINANCIAL HIGHLIGHTS

REVENUE/PBT/PATAMI

425.1 514.3 399.0 396.3 473.2 36.9 45.7 37.6 45.7 67.5 23.3 26.5 23.2 29.0 44.5 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 100 200 300 400 500 600 2008 2009 2010 2011 2012 (unaudited) PBT/PATAMI (RM Million) Revenue (RM Million) Revenue PBT PATAMI

Revenue has increased by RM76.9 million or 19.4% year on year while PBT has increased by RM21.8 million or 47.6% year on year largely due to the improved contributions made by ALL segments (details of which are described in the following slides.

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11.0 12.0 11.5 14.0 15.0 47% 45% 49% 48% 50.6% 0% 10% 20% 30% 40% 50% 60% 0.0 5.0 10.0 15.0 20.0 25.0 2008 2009 2010 2011 2012 (unaudited) Dividend Payout Ratio (%) Dividend Per Share (Sen) Dividend Per Share (Sen) Dividend Payout Ratio (%)

GROUP CASH & BORROWINGS PROPERTIES, EQUIPMENT & TOTAL FIXED ASSETS

FINANCIAL HIGHLIGHTS

EMPLOYEES DIVIDEND

36 62 58 71 81 6 25 22 27 19 30 37 36 44 62 10 20 30 40 50 60 70 80 90 2008 2009 2010 2011 2012 (unaudited) (RM Million) Total Cash Total Borrowings Net Cash 253 391 456 510 585 100 200 300 400 500 600 700 2008 2009 2010 2011 2012

• No. of Employee

18 20 20 19 19 42 75 75 81 80 62 95 94 100 99 20 40 60 80 100 120 20 40 60 80 100 120 2008 2009 2010 2011 2012 (unaudited) Total Fixed Assets (RM Million) Properties/ Equipment (RM Million) Properties Equipment Total Fixed Assets

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QUARTERLY RESULTS FOR Q4 FY2012

REVENUE/PBT/PATAMI

Revenue increased by 45.7% from the previous year’s corresponding Q4 Power & Machinery segment increased by RM55.1 million mainly attributable to:

• supply of new refurbishment equipment for a retrofit

project

• verhauling activities
• maintenance and installation of valves and flow

regulators Oilfield Services segment experienced a reduction in revenue by RM12.3 million due to:

• lower wireline and survey job utilisation
• lower demand for centralizers
• MRO segment experienced an increase in revenue by

RM6.0 million due to the inclusion of Deleum Primera’s post acquisition revenue of RM5.1 million upon completion of the acquisition PBT increased by 54.6% from the previous year’s corresponding Q4 Higher operating profit of RM7.8 million arising from the Power & Machinery segment on the back of higher revenue Improvement of MRO segment attributable to the inclusion of Deleum Primera’s post acquisition results of RM0.5 million during the quarter under review.

106.5 155.2 12.5 19.3 7.2 13.5

• 5.0

10.0 15.0 20.0 25.0

• 20.0

40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 31 Dec 2011 31 Dec 2012 (unaudited) PBT/PATAMI (RM Million) Revenue (RM Million) Revenue Profit Before Tax PATAMI

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CUMULATIVE Q4 FY2012 RESULTS

REVENUE/PBT/PATAMI

The cumulative Q4 revenue increased by 19.4% from the previous financial year ended 2011(FY2011) The increase was due to higher contribution by Power & Machinery segment of RM62.1 million, arising from: Increased demand from customers on the back of robust exploration and production activities Increased sales mainly from retrofit projects and valves and regulators Oilfield Services segment increase of RM11.0 million - due to higher deployment of wireline equipment and related products achieved in the first 6 months of the year MRO segment increased by RM3.8 million attributable to: Inclusion of Deleum Primera’s post acquisition revenue

• f RM5.1 million upon completion of the acquisition

Offset by the decline in revenue from Deleum Rotary by RM1.3 million due to lower business activities PBT increased by RM21.8 million or 47.6% from FY2011 The increase is largely due to: RM19.3 million from Power & Machinery segment – higher profit contribution on the back of robust exploration and production activities Oilfield Services segment by RM1.2 million – contribution from oilfield chemicals and higher sales from wellhead maintenance spares MRO segment by RM1.0 million – mainly attributable to inclusion of Deleum Primera’s results post completion and lower losses recorded by Deleum Rotary

396.3 473.2 45.7 67.5 29.0 44.5

• 10.0

20.0 30.0 40.0 50.0 60.0 70.0

• 50.0

100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 Year ended 31 Dec 2011 Year ended 31 Dec 2012 (unaudited) PBT/PATAMI (RM Million) Revenue (RM Million) Revenue Profit Before Tax

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SEGMENTAL REPORTING FOR Q4 FY2012

Segment Revenue Composition for Cumulative Q4 ended 31/12/2011

Segmental Reporting (External Revenue)

Segment Revenue Composition for Cumulative Q4 ended 31/12/2012 Q4 Ended 31/12/12 Q4 Ended 31/12/11 % Changes Cumulative Q4 Ended 31/12/12 Cumulative Q4 Ended 31/12/11 % Changes RM'000 RM'000 RM'000 RM'000 Power and Machinery 139,061 83,984 65.6% 379,467 317,333 19.6% Oilfield Services 7,695 20,030

• 61.6%

76,938 65,956 16.7% MRO 8,493 2,530 235.7% 16,835 13,014 29.4% Total Group revenue 155,249 106,544 45.7% 473,240 396,303 19.4%

Power and Machinery 80.2% Oilfield Services 16.3% MRO 3.6% Power and Machinery 80.1% Oilfield Services 16.6% MRO 3.3%

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RECENT CORPORATE EVENTS

15 Mar 2012: 1 for 2 bonus issue 22 May 2012: FY2012-1st quarter results 24 May 2012: FY2011 Results & Announcement of entitlement date for bonus issue 14 Aug 2012: FY2012-2nd quarter results, interim dividend and acquisition

• f NPSB

3 Sep 2012: Appointment

• f GCOO

1.84 1.55 1.83 1.67 1.43 26 Nov 2012: FY2012-3rd quarter results 1.80 4 Jan 2013: Proposed equity subscription in NSERC 1.91

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CORPORATE DIRECTORY

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Disclaimer:

• The content of this presentation includes materials which may be capable of

being interpreted as forward-looking statements. Such statements are merely predictions, based on circumstances and reasonable assumptions which apply

• nly at the date of such statements. Accordingly, no reliance should be placed
• n any forward-looking statement, express or implied, contained in this

presentation.

• Forward-looking statements involve assumptions concerning various risks and

uncertainties including, but not limited to, the Company’s development activities, the existence of competent management, the Company’s financial activities, the domestic and global economy, changes in applicable laws and regulations, the obtaining of approvals and stock market activity. Actual results, performance and levels of activity may differ significantly from those expressed or implied in any forward-looking statements. As such, the Company gives no assurances that any of the events anticipated by any forward-looking statements will actually occur, or what the actual outcome or results of such events will be. In addition, the Company gives no undertaking that it will update or alter any forward-looking statements, irrespective of what may transpire after such statement is made.

For more information, please visit us at www.deleum.com

Updated as at 26 February 2013