FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 th JUNE 2019 3 0 AUG - - PowerPoint PPT Presentation

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FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 th JUNE 2019 3 0 AUG - - PowerPoint PPT Presentation

FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 th JUNE 2019 3 0 AUG UST 2 0 1 9 1 DISCLAIMER This material does not constitute and is not an offer to sell or the solicitation of an offer to buy securities of any company referred to in this


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SLIDE 1

FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30th JUNE 2019

3 0 AUG UST 2 0 1 9

1

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SLIDE 2

Private & Confidential

DISCLAIMER

This material does not constitute and is not an offer to sell or the solicitation of an offer to buy securities of any company referred to in this presentation in the United States or elsewhere. The Company has not registered and do not intend to register any securities under the US Securities Act of 1933, as amended (the “Securities Act”), and any securities may not be offered or sold in the United States absent registration under the Securities Act or an exemption from registration under the Securities Act. This material may contain forward-looking statements by the Company that reflect management’s current expectations, beliefs, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are based

  • n various assumptions and made subject to a number of risks, uncertainties and contingencies. Actual results, performance or

achievements may differ materially and significantly from those discussed in the forward-looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the future performance or achievements of the Company and the Company assumes no obligation or responsibility to update any such statements. No representation or warranty (either express or implied) is given by or on behalf of the Company or its related corporations (including without limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers) (collectively, the "Parties") as to the quality, accuracy, reliability or completeness of the information contained in this presentation (collectively, the "Information"), or that reasonable care has been taken in compiling or preparing the Information. None of the Parties shall be liable or responsible for any budget, forecast or forward-looking statements or other projections of any nature or any opinion which may have been expressed or otherwise contained or referred to in the Information. The Information is and shall remain the exclusive property of the Company and nothing herein shall give, or shall be construed as giving, to any recipient(s) or party any right, title, ownership, interest, license or any other right whatsoever in or to the Information

  • herein. The recipient(s) acknowledges and agrees that this presentation and the Information are confidential and shall be held in

complete confidence by the recipient(s). This presentation is for the purposes of information only and no part of this presentation is intended to be or shall be construed as an offer, recommendation or invitation to subscribe for or purchase, or otherwise making available, any securities in the Company.

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SLIDE 3

INDUSTRY UPDATE

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Private & Confidential

35.3 46.5 46.8 50.9 55.1 50.7 52.4 61.6 67.3 74.5 76.2 68.0 62.9 68.2 64.5 59.1

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Jul-19 Aug-19

2016 2017 2018

(USD/bbl)

Oil prices remained relatively stable in 2Q19

2019

OIL PRICE STABILISING IN 2Q 2019:

  • OPEC+ quota extension
  • Iran and Venezuela sanction
  • Declining production capacity

BUT THREATENED BY:

  • Increased US production
  • Trade disputes
  • Fear of global economic slowdown

BRENT PRICE MOVEMENT

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SLIDE 5

Private & Confidential

61

Not Marketed

521

Total Global Jack-up Rigs

81

idling

Jack-up Rigs Available for Contract

460

379

contracted

<30

yrs yrs

293

JUs

167

JUs

Lesser rigs available

in the future

Potential to be Retired

Potential Rigs Coming Out From The Yard Total

Total 58

Source: IHS Petrodata August 2019

minus

DRILLING RIGS OUTLOOK - SUPPLY

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SLIDE 6

Private & Confidential

WORLDWIDE JACK-UP DEMAND REGION 2019A 2020F

Information as at August

Southeast Asia (Excl. Malaysia) 29 35 Malaysia 14 12 Middle East / India 164 189 Others 172 169

TOTAL 379 405

Does not include PETRONAS’ latest additional Jack-up rig requirement for 2019

405 379

2019A 2020F

TOTAL JU DEMAND

Increasing

26

Does not include PETRONAS’ latest additional Jack-up rig requirement for 2019 and 2020

DRILLING RIGS OUTLOOK - DEMAND

Source: IHS World Rig Forecast: Short Term Trends August 2019

Total Rig in Malaysia 20 Contracted 14 Average Contracted Rig Utilisation 70%

Source: IHS Petrodata August 2019

Current Utilisation in Malaysia

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SLIDE 7

COMPANY OUTLOOK

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SLIDE 8

Private & Confidential

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RIG UTILISATION AND AVERAGE DAILY CHARTER RATE

151 128 87 68 69 95 52 21 70 73

50 100 150 200 250

2014 2015 2016 2017 2018 2019F

  • 40
  • 20

20 40 60 80 100 Axis Title Axis Title

DCR (USD '000/day) Utilisation

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SLIDE 9

Private & Confidential

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LATEST ORDER BOOK STATUS

As at 31 July 2019

RM 1.1 b

+

RM 0.9 b

(option)

= RM 2.0 b

Total Contract Value

NAGA 2 NAGA 3 NAGA 3 NAGA 4 NAGA 5 NAGA 6 NAGA 7 NAGA 8

RM 0.6 b

+

RM 0.9 b

(option)

= RM 1.5 b

Remaining Order Book

PCSB PCSB PCSB PCSB 5-Yearly SPS HESS ROC OIL

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SLIDE 10

Private & Confidential

24 26 8

34

Total Bid Value

RM 3.6 bil

Short Term Long Term Total

10

As at 31 July 2019

10

CURRENT TENDER ACTIVITIES

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SLIDE 11

Private & Confidential

11

1.6% 60.0% 5.1% 6.8% 21.3%

* *

: PNB and Funds

2.2% 3.0%

Note: As at 21 Aug 2019

Foreign shareholding: 5.2%

MAJOR SHAREHOLDERS

Urusharta Jamaah EPF PNB Public Mutual Manulife Vanguard

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SLIDE 12

Private & Confidential

VELESTO ADDED TO THE FTSE4GOOD BURSA MALAYSIA INDEX ON 24 JUNE 2019

12

RM573 mil Payment to Employees Purchases from Local Suppliers Group Revenue/ Turnover

Environment

SOCIAL ECONOMIC ENVIRONMENT

Community Investment 61,372

tCO2e

Greenhouse Emission 53% 63% 67% Purchases from Local Supplier (%)

2016 2017 2018

0.25

bbls

Environmental Spills We minimise the impact of our activities

RM120 mil RM131 mil

We develop capabilities in

  • ur

supply chain and employees We invest in

  • ur

people and communities

Safety Education

2018

60,060

tCO2e

2018 2017

21.5

bbls

2017

Malaysian

591 431 484 494 197 144 161 165 2015 2016 2017 2018

BREAKDOWN OF VELESTO’s MALAYSIAN & INTERNATIONAL EMPLOYEES International

SUSTAINABILITY

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SLIDE 13

13

FINANCIALS

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SLIDE 14

Private & Confidential

RM157m RM12m RM79m

74%

USD71k

97.8% 2Q 2019

14

KEY FINANCIAL HIGHLIGHTS

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Private & Confidential

(105) (52) 3 7 5 (25) (14) 25 (22) 12 1 46 101 101 71 40 55 105 50 79 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

PAT/ (LAT) excluding impairment EBITDA

74 140 181 192 122 112 150 190 127 157 26% 68% 90% 95% 65% 59% 75% 91% 66% 74%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

  • 50

100 150 200 250

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Revenue Utilisation 15

DCR

(USD ‘k)

(RM mil) (RM mil)

EVOLUTION OF PERFORMANCE – QUARTERLY

72 70 68 68 68 68 70 68 69 71

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SLIDE 16

Private & Confidential

2,254 4,004 3,773 1,860 1,437 1,349 1,348 0.70 1.20 1.67 0.67 0.51 0.49 0.48

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80

  • 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

2014 2015 2016 2017 2018 1Q 19 2Q 19 Total Borrowings Gross Debt/Equity

16 Cash & cash equivalents Short-term placements Total RM216 mil RM118 mil RM334 mil

RM mil

Mandatory payment RM34.9 mil (2018) + RM41.9 mil (2019) Voluntary pre-payment RM397.4 mil (2018) + RM50 mil (2019)

MAINTAINING LOW DEBT/ EQUITY RATIO

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SLIDE 17

Private & Confidential

0.98 0.93 0.92 0.39 0.32 0.33 0.34 0.34 0.33 0.34 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

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Share Price

29/08/2019

RM 0.300

Market Capitalisation

29/08/2019

RM 2.465 billion

RM

NET ASSET PER SHARE

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SLIDE 18

Private & Confidential

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Financial Ratios 2014 2015 2016 2017 2018 1Q19 2Q19 Revenue (RM mil)

1,015 840 321 587 574 127 157

Revenue growth (%)

37.5 (17.2) (61.8) 82.7 (2.3) 4.2 40.5

EBITDA margin (%)

43.6 36.8 2.8 42.4 47.3 39.5 50.3

PAT (excl. impairment) margin (%)

25.0 (2.5) (125.2) (25.1) (1.6) (17.5) 7.5

Basic EPS per share (sen)

11.7 (17.1) (54.5) (36.8) (0.24) (0.27) 0.15

Total Borrowings

3,268 4,004 3,773 1,860 1,437 1,349 1,348

Gross Debt to Equity ratio

0.70 1.20 1.67 0.67 0.51 0.49 0.48

EBITDA / Interest (times)

17.0 4.8 0.1 1.8 3.2 2.3 3.7

1 1

Compared with previous year corresponding quarter

KEY FINANCIAL RATIOS

1

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Private & Confidential

Rationale for Proposed ESOS

Strengthen alignment of employees to the Company’s long term

  • bjectives

and shareholders’ interest. Instill a greater sense of

  • wnership

and belonging to enhance productivity and motivate employees. Create a more competitive total compensation package for performing employees.

Organisational alignment Compensation and retention Ownership in the Company Entrepreneurship

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

Promote enterprise leadership to drive returns and achievement

  • f

long term goals.

Financial Impact Timeline

Target implementation by 4th quarter of 2019 Expense arising will be recognised in the P&L

  • ver the vesting period.

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Private & Confidential

The salient terms for the Proposed ESOS are set out below:

► Up to 7.5% of the total

number of issued shares

  • f the Company

Maximum issue size Option exercise price

► <10% discount to the 5-

day VWAP preceding the date of offer Duration

► 5 years, with an option

to extend for a further 5 years Ranking of shares Retention period Termination

► Shares issued will rank

pari passu in all aspects to existing VEB shares.

► Shares issued will not be

subject to any retention period

► May be terminated,

provided an announcement is made to Bursa Securities.

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

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Private & Confidential

The salient terms for the Proposed ESOS are set out below (cont’d):

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

Eligibility ►

At least 18 years of age

Not bankrupt/subject to bankruptcy proceedings.

► For Non-Malaysians, subject to approvals from relevant

authorities

Basis of allotment ►

Not exceeding the maximum issue size of up to 7.5% of the total number of issued shares of the Company;

<10% to an eligible person or persons connected who individually or collectively holds >20% equity interest in VEB;

<50% to Executive Directors and senior management

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SLIDE 22

MOVING FORWARD

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Private & Confidential

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Certain level of stability in oil price with upward potential Sustained global recovery of oil and gas industry Sustained increase in exploration and production activities Increased utilisation of jack-up rigs Further increase in day rates and longer contract duration Shortage of skilled personnel

CURRENT OUTLOOK

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Private & Confidential

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Continue to pursue medium term contract for remaining rigs Work towards further increase in day rates and improved terms & conditions Continue to improve operational, financial and costs efficiency Increase Hydraulic Workover Unit activities Develop and retain streams of affordable human capitals Explore wider client base and geographical coverage

WHAT ARE WE DOING

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THANK YOU

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