Unaudited First Quarter ( 1Q 2016 ) Financial Statement and Dividend Announcement For the Three Months Ended 31 March 2016 ( 3M 2016 )

Transcription

1 PACIFIC RADIANCE LTD Company Registration No C Unaudited First Quarter ( 1Q 2016 ) Financial Statement and Dividend Announcement For the Three Months Ended 31 March 2016 ( 3M 2016 ) PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a)(i) An income statement and statement of comprehensive income or a statement of comprehensive income (for the ) together with a comparative statement for the corresponding period of the immediately preceding financial year. 1Q Q 2015* +/(-) US$ 000 US$ 000 % Revenue 18,366 31,543 (42) Cost of sales (19,693) (20,051) (2) Gross profit (1,327) 11,492 NM Other operating income 3,415 3, General and administrative expenses (5,418) (6,007) (10) Other operating expenses (822) (3,054) (73) Finance costs (3,251) (2,781) 17 Share of results of joint ventures 759 1,001 (24) Share of results of associate 121 (665) NM (Loss)/profit before taxation (6,523) 3,055 NM Taxation (341) (344) (1) (Loss)/profit for the period (6,864) 2,711 NM Other comprehensive income/(loss): Items that may be reclassified subsequently to profit or loss: Foreign currency translation (244) (32) NM Net fair value changes on cash flow hedges 2,184 (1,465) NM Share of other comprehensive income of a joint venture 209 NM Other comprehensive income/(loss) for the period, net of tax 2,149 (1,497) NM Total comprehensive (loss)/income for the period (4,715) 1,214 NM (Loss)/profit for the period attributable to: Equity holders of the Company (6,764) 2,528 NM Non-controlling interests (100) 183 NM Total comprehensive (loss)/income for the period attributable to: (6,864) 2,711 NM Equity holders of the Company (4,638) 1,061 NM Non-controlling interests (77) 153 NM (4,715) 1,214 NM NM: Not Meaningful * Some of the prior period s comparative figures have been restated to present the impact of change in accounting estimate with effect from 1 January

2 1(a)(ii) (Loss)/profit for the period was stated after charging/(crediting) the following: 1Q Q 2015* US$ 000 US$ 000 Depreciation of property, plant and equipment 7,048 6,298 Impairment of doubtful receivables, net 105 Net fair value loss on derivatives Exchange (gain)/loss (257) 2,429 Net gain on acquisition of a subsidiary (793) Interest income (2,143) (2,039) Net fair value gain on investment securities (45) Net gain on disposal of investment securities (25) Realisation of deferred gain on sale of vessels to joint ventures (included in share of results of joint ventures) (166) (97) Realisation of deferred gain on sale of vessels to associate (included in share of results of associates) (121) (40) * Some of the prior period s comparative figures have been restated to present the impact of change in accounting estimate with effect from 1 January

3 1(b)(i) A statement of financial position (for the issuer and ), together with a comparative statement as at the end of the immediately preceding financial year. ASSETS 31 Mar Dec Mar 2016 Company 31 Dec 2015 US$ 000 US$ 000 US$ 000 US$ 000 Non-current assets Property, plant and equipment 673, ,249 Investment in subsidiaries 44,752 44,752 Investment in associate Investment in joint ventures 62,890 68,045 Club memberships Amount due from related companies 71,318 75,363 Derivatives , ,004 44,752 44,752 Current assets Inventories 1, Trade receivables 25,145 25,249 Other receivables 20,347 13, Amounts due from related companies 87,956 83, , ,378 Investment securities Cash and cash equivalents 32,680 43, , , , ,857 Total assets 975, , , ,609 EQUITY AND LIABILITIES Current liabilities Trade payables 13,035 14,321 Other liabilities 53,671 55,180 1,906 2,733 Amounts due to related companies 3,020 1, , ,065 Bank loans 110,854 80,512 Provision for taxation 3,671 3, Finance lease obligations Derivatives , , , ,982 Non-current liabilities Other liabilities 12,849 13,117 Provisions Deferred capital grant 1,418 1,418 Bank loans 284, ,977 Notes payable 70,858 69,331 70,858 69,331 Deferred tax liabilities Finance lease obligations Derivatives 8,515 12,390 7,561 11, , ,973 78,419 81,302 Total liabilities 563, , , ,284 Net assets 411, , , ,325 3

4 1(b)(i) A statement of financial position (for the issuer and ), together with a comparative statement as at the end of the immediately preceding financial year (cont'd). 31 Mar Dec Mar 2016 Company 31 Dec 2015 US$ 000 US$ 000 US$ 000 US$ 000 Equity attributable to equity holders of the Company Share capital 162, , , ,854 Treasury shares (2,128) (817) (2,128) (817) Retained earnings 259, ,416 15,145 14,443 Other reserves (12,939) (15,065) 29 (2,155) 407, , , ,325 Non-controlling interests 4,483 2,623 Total equity 411, , , ,325 4

5 1(b)(ii) Aggregate amount of s borrowings and debt securities. Amount repayable in one year or less, or on demand 31 Mar Dec 2015 Secured Unsecured Secured Unsecured US$ 000 US$ 000 US$ 000 US$ , , Amount repayable after one year 31 Mar Dec 2015 Secured Unsecured Secured Unsecured US$ 000 US$ 000 US$ 000 US$ ,708 74, ,652 72,779 Details of any collateral: The s secured portion of bank loans is secured by: First legal mortgages over the vessels of the, with net book values of US$533.8 million and US$412.5 million as at 31 March 2016 and 31 December 2015 respectively; Escrow mortgages over the buildings and ship-repair yard under construction of the, with net book values of US$55.0 million and US$47.7 million as at 31 March 2016 and 31 December 2015 respectively; A right to take assignment of charter earnings and insurance policies of the mortgaged vessels; and Cash pledged of US$7.4 million and US$4.2 million as at 31 March 2016 and 31 December 2015 respectively. In addition, certain of the s bank loans are secured by corporate guarantees from the Company. 5

6 1(c) A statement of cash flows (for the ), together with a comparative statement for the corresponding period of the immediately preceding financial year. 6 1Q Q 2015* US$ 000 US$ 000 Cash flows from operating activities: Profit before taxation (6,523) 3,055 Adjustments for: Depreciation of property, plant and equipment 7,048 6,298 Interest expense 3,251 2,781 Interest income (2,143) (2,039) Share of results of joint ventures (759) (1,001) Share of result of associate (121) 665 Impairment of doubtful receivables, net 105 Impairment of club memberships 123 Net gain on acquisition of a subsidiary (793) Net fair value loss on derivatives Net fair value gain on investment securities (45) Net gain on disposal of investment securities (25) Exchange difference (1,316) 1,399 Operating cash flows before changes in working capital (607) 11,768 (Increase)/Decrease in trade and other receivables (4,005) 3,267 (Increase)/Decrease in amounts due from/to related companies (3,827) 1,772 Increase in inventories (285) (438) (Decrease)/Increase in trade payables and other liabilities (2,537) 14,184 Cash (used in)/generated from operations (11,261) 30,553 Taxes paid (279) (694) Interest paid (3,592) (3,027) Interest received Net cash flows (used in)/generated from operating activities (15,087) 26,879 Cash flows from investing activities: Additions to property, plant and equipment (42,630) (70,618) Investment in joint ventures (843) Proceeds from sale of investment securities 94 Net cash inflow on acquisition of a subsidiary 736 Loans repayment (to)/from related companies, net (36) 9,660 Net cash flows used in investing activities (41,836) (61,801) Cash flows from financing activities: Equity contribution by non-controlling interests 740 Repayment of finance lease obligations (35) (10) Proceeds from bank loans 63,795 68,076 Repayment of bank loans (16,036) (34,982) Purchase of treasury shares (1,311) Cash and cash equivalents pledged as securities (3,246) (1,209) Net cash flows generated from financing activities 43,167 32,615 Net decrease in cash and cash equivalents (13,756) (2,307) Effect of exchange rate changes on cash and cash equivalents 57 (23) Cash and cash equivalents at beginning of period 38, ,736 Cash and cash equivalents at end of the period 25,261 98,406 Breakdown of cash and cash equivalents at end of the period: Cash and cash equivalents as per balance sheet 32, ,314 Cash pledged (7,419) (1,908) 25,261 98,406 * Some of the prior period s comparative figures have been restated to present the impact of change in accounting estimate with effect from 1 January 2015.

7 1(d)(i) A statement (for the issuer and ) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. Share capital Treasury Shares Retained earnings Total other reserves Foreign currency translation reserve Employee share-based payments reserve Hedging reserve Capital reserve Total Noncontrolling interests Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 The Balance at 1 January ,854 (817) 266,416 (15,065) (9,290) 172 (2,768) (3,179) 413,388 2, ,011 Loss for the period (6,764) (6,764) (100) (6,864) Other comprehensive income - Foreign currency translation (267) (267) (267) 23 (244) - Net fair value changes on cash flow hedges 2,184 2,184 2,184 2,184 - Share of other comprehensive income of a joint venture Total comprehensive loss for the period (6,764) 2,126 (267) 2,393 (4,638) (77) (4,715) Purchase of treasury shares (1,311) (1,311) (1,311) Changes in ownership interest in subsidiaries Acquisition of subsidiary 1,937 1,937 Balance at 31 March ,854 (2,128) 259,652 (12,939) (9,557) 172 (375) (3,179) 407,439 4, ,922 Balance at 1 January , ,603 (13,495) (8,989) 172 (1,499) (3,179) 427,962 3, ,919 Profit for the period 2,528 2, ,711 Other comprehensive income - Foreign currency translation (2) (2) (2) (30) (32) - Net fair value changes on cash flow hedges (1,465) (1,465) (1,465) (1,465) Total comprehensive income for the period 2,528 (1,467) (2) (1,465) 1, ,214 Changes in ownership interest in subsidiaries Equity contribution by non-controlling interest Balance at 31 March , ,131 (14,962) (8,991) 172 (2,964) (3,179) 429,023 4, ,873 7

8 1(d)(i) A statement (for the issuer and ) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year (cont'd). Share capital Treasury Shares Retained earnings Total other reserves Employee sharebased payments reserve Hedging reserve Total US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 The Company Balance at 1 January ,854 (817) 14,443 (2,155) 172 (2,327) 174,325 Profit for the period Other comprehensive income: - Net fair value changes on cash flow hedges 2,184 2,184 2,184 Total comprehensive income for the period 702 2,184 2,184 2,886 Purchase of treasury shares (1,311) (1,311) Balance at 31 March ,854 (2,128) 15, (143) 175,900 Balance at 1 January ,854 14,720 (1,327) 172 (1,499) 176,247 Profit for the period 17,709 17,709 Other comprehensive income: - Net fair value changes on cash flow hedges (1,465) (1,465) (1,465) Total comprehensive income for the period 17,709 (1,465) (1,465) 16,244 Balance at 31 March ,854 32,429 (2,792) 172 (2,964) 192,491 8

9 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. Under the Share Buy Back Mandate (first approved by the Shareholders on 30 April 2014 and last renewed at the Annual General Meeting on 28 April 2016), the Company bought back 6,236,400 ordinary shares during the first quarter of These shares are held as treasury shares. The amount paid, including brokerage fees, totalled US$1,310, and was deducted against shareholders equity. 31 March 2016, the Company s total issued shares is 725,755,013 ordinary shares (31 December 2015: 725,755,013) with 9,917,400 (31 December 2015: 3,681,000) shares being held as treasury shares. 1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year. The Company s total issued shares excluding treasury shares is 715,837,613 as at 31 March 2016 (31 December 2015: 722,074,013). 1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. The movement of treasury shares are as follows: 1 January 2016 Purchase of treasury shares during the period 31 March 2016 : 3,681,000 shares : 6,236,400 shares : 9,917,400 shares 2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The financial statements for the periods under review have not been audited or reviewed by the Company s auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. The has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current financial reporting period as those applied in the audited financial statements for the year ended 31 December

10 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of the change. On 1 January 2016, the and the Company adopted all new and revised FRSs and interpretation of FRS ( INT FRS ) that are relevant to its operations and effective for annual periods beginning on or after 1 January The adoption of these new/revised FRSs and INT FRSs has no material effect on the financial statements. 6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. 1Q Q 2015 (Loss)/profit attributable to equity holders of the Company (US$ 000) (6,764) 2,528 Weighted average ordinary shares for calculation ( 000): - applicable to basic earnings per share 723, ,755 - based on a fully diluted basis 723, ,755 (Loss)/earnings per ordinary share ( EPS ) (US cents) (a) Based on weighted average number of ordinary shares on issue (0.9) 0.3 (b) On a fully diluted basis (0.9) Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the: (a) (b) current financial period reported on; and immediately preceding financial year. 31 Mar Dec Mar 16 Company 31 Dec 15 Net asset value (US$ 000) 411, , , ,325 Total number of ordinary shares issued ( 000) 715, , , ,074 Net asset value per ordinary share (US cents)

11 8. A review of the performance of the, to the extent necessary for a reasonable understanding of the s business. It must include a discussion of the following: (a) (b) any significant factors that affected the turnover, costs, and earnings of the for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and any material factors that affected the cash flow, working capital, assets or liabilities of the during the current financial period reported on. REVIEW OF GROUP PERFORMANCE Revenue Revenue decreased by approximately US$13.2 million or 42% from US$31.5 million in 1Q 2015 to US$18.4 million in 1Q The decrease was mainly attributable to the decline in revenue of our Subsea Business of US$1.5 million or 61% from US$2.5 million in 1Q 2015 to US$1.0 million in 1Q 2016, and from our Offshore Support Services Business of US$11.6 million or 40% from US$28.6 million in 1Q 2015 to US$17.0 million in 1Q The decrease in revenue was mainly attributable to the significantly weaker market conditions arising from the severe drop in oil prices. Gross profit Gross profit decreased by approximately US$12.8 million from a gain of US$11.5 million in 1Q 2015 to a loss of US$1.3 million in 1Q The overall decrease in gross profit was mainly attributable to weaker performance from our Subsea Business and Offshore Support Services Business in line with the reasons stated above. Other operating income Other operating income increased by approximately US$0.3 million or 11% from US$3.1 million in 1Q 2015 to US$3.4 million in 1Q General and administrative expenses General and administrative expenses decreased by approximately US$0.6 million or 10% from US$6.0 million in 1Q 2015 to US$5.4 million in 1Q 2016, on the back of cost reduction initiatives. Other operating expenses Other operating expenses decreased by approximately US$2.2 million or 73% from US$3.0 million in 1Q 2015 to US$0.8 million in 1Q The decrease was mainly due to foreign exchange loss of US$2.4 million loss recorded in 1Q 2015 as opposed to foreign exchange gain of US$0.3 million in 1Q

12 REVIEW OF GROUP PERFORMANCE (CONT D) Finance costs Finance cost increased by approximately US$0.5 million or 17% from US$2.8 million in 1Q 2015 to US$3.3 million in 1Q The increase in finance costs was in line with the increase in bank loans, finance lease obligations and notes payable outstanding from US$357.2 million as at 31 March 2015 to US$466.9 million as at 31 March Share of results of joint ventures Share of results of joint ventures decreased by approximately US$0.2 million or 24% from US$1.0 million in 1Q 2015 to US$0.8 million in 1Q 2016 due to softer market conditions. Share of results of associate Share of results of associate increased by approximately US$0.8 million from share of loss of US$0.7 million in 1Q 2015 to a share of gain of US$0.1 million in 1Q REVIEW OF STATEMENT OF FINANCIAL POSITION Non-current assets The s non-current assets amounted to US$807.9 million as at 31 March The increase in noncurrent assets from US$750.0 million as at 31 December 2015 was mainly due to: (i) (ii) (iii) Increase in property, plant and equipment of US$67.3 million; and Partially offset by decrease in investment in joint ventures of US$5.2 million primarily due to a joint venture being consolidated as a subsidiary as at 31 March 2016; and Decrease in amount due from other related companies of US$4.0 million. Current assets The s current assets amounted to US$167.5 million as at 31 March The increase in current assets from US$166.6 million as at 31 December 2015 was mainly due to: (i) (ii) (iii) Increase in other receivables of US$6.5 million; Increase in amounts due from related companies of US$4.6 million; and Partially offset by decrease in cash and cash equivalents of US$10.5 million. 12

13 REVIEW OF STATEMENT OF FINANCIAL POSITION (CONT D) Current liabilities The s current liabilities amounted to US$184.4 million as at 31 March The increase in current liabilities from US$154.7 million as at 31 December 2015 was mainly attributable to the increase in current bank loans of US$30.0 million. Non-current liabilities The s non-current liabilities amounted to US$378.9 million as at 31 March Non-current liabilities increased from US$346.0 million as at 31 December 2015 primarily due to net increase in bank loans of US$35.6 million which is offset by the decrease in derivatives of US$3.9 million. REVIEW OF CASH FLOWS In 1Q 2016, the recorded net cash outflow from operating activities of approximately US$15.1 million, which comprises cash outflow from operating activities before working capital changes of US$0.6 million, net working capital outflow of US$10.6 million, net interest paid of US$3.6 million, and taxes paid of US$0.3 million. The net cash outflow from changes in working capital of US$10.6 million was mainly due to:- (i) (ii) (iii) (iv) Increase in trade and other receivables of US$4.0 million; Increase in amounts due from/to related companies of US$3.8 million; Increase in inventories of US$0.3 million; and Decrease in trade payables and other liabilities of US$2.5 million. Net cash outflow from investing activities was approximately US$41.8 million, which was mainly due to:- (i) (ii) Additions to property, plant and equipment of US$42.6 million; and Partially offset by net cash inflow on acquisition of a subsidiary of US$0.7 million. Net cash inflow from financing activities was approximately US$44.7 million, which was mainly due to:- (i) (ii) (iii) (iv) Proceeds from bank loans of US$63.8 million; and Partially offset by repayment of bank loans of US$16.0 million; Purchase of treasury shares of US$1.3 million; and Cash and cash equivalents pledged as securities of US$1.7 million. 13

14 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. Not applicable. 10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. The oil & gas sector continues on its long journey along the curvature of the industry downturn. Whilst geo-political factors continue to affect commodity prices, there have also been signs of the supply side of US oil production on the downtrend, notwithstanding the potential increase from Iran. In the meantime, global demand for fossil fuels continues to increase. Oil prices seem to have been stabilising around US$40 per barrel recently, although this glimmer of hope will take time to manifest into financial results as the sector typically experiences a lag period for the effect of higher oil prices to boost activities. The remains focussed on the tasks ahead over the next 12 months in executing its strategic and tactical initiatives to successfully and sustainably overcome the challenges ahead. 11. Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? No. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? No. (c) Date payable Not applicable. (d) Books closure date Not applicable. 12. If no dividend has been declared/recommended, a statement to that effect. Not applicable. 13. If the has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect. Not applicable as the has not obtained a general mandate from shareholders for Interested Party Transactions ( IPTs ). 14. Confirmation by the Board pursuant to SGX Listing Rule 705(5) The Board hereby confirm to the best of their knowledge that nothing has come to the attention of the Board of Directors of the Company which may render the financial statements for the three months ended 31 March 2016 to be false or misleading in any material respect. 14

15 On behalf of the Board of Directors Pang Yoke Min Executive Chairman Mok Weng Vai Executive Director 12 May