KSH HOLDINGS LIMITED Corporate Presentation November 6, 2009
Presentation Outline Business Overview Financial Performance Corporate Developments Track Record Completed Projects Property Development Future Plans Outlook
Business Overview
Our Business A well-established Construction, Property Development and Property Management Group Extensive expertise and proven track record in multiple segments: residential, commercial, industrial, power plants, hospital, hotels, school campuses etc Primary focus: Construction (with 30 years of experience) Impressive track record, especially in Public Sector construction activities A1 grading under CW01 category for general building by the Building and Construction Authority (BCA) Highest grade for contractors (current number: 43) and allows KSH to tender for public sector construction projects of unlimited value A2 grading under BCA s CW02 category for civil engineering which allows KSH to tender for public sector civil engineering contracts of up to S$85 million in value Strong Construction Order Books Backed by strong order books of approx. S$383 million Substantial portion to be completed by the end of FY2010 4 4
Our Business Construction Property Development and Property Management in the PRC Property Development and Property Management in Singapore Public and Private sectors in Singapore Private sector in Malaysia Tianxing Riverfront Square in Tianjin* * Currently held as Investment Property Liang Jing Ming Ju in Beijing Via Joint Ventures: - Lincoln Suites - Mergui Road Development 5 5
Our Major Customers Public Sector*: CAAS Ministry of Home Affairs SAFRA Ministry of Education Private Sector*: Ho Bee Group Lippo Marina Collection Pte. Ltd Keppel Land Realty Pte Ltd Sino Land Limited SUTL * Not Exhaustive 6 6
Financial Performance
1HFY2010 Results Highlights Revenue of S$124.9 million and net profit after tax of S$10.1 million Average gross margin of core Construction segment up from 9.3% to 15.5% Strong balance sheet and working capital position with cash and cash equivalents of approximately S$48.6 million Low net gearing ratio of 0.52 times (as at September 30, 2009) Strong order book of approximately S$383 million Unfulfilled contract value for all existing contracts on hand expected to be substantially completed by March 2010 8
Results Highlights S$ m 1HFY2010* 1HFY2009** % Change FY2009*** Revenue 124.9 179.7 (30.5) 328.7 Profit Before Tax 12.7 13.1 (3.1) 17.3 Net Profit (Before MI) Attributable to Shareholders 10.1 10.8 (6.5) 13.6 Net Profit Margin (%) 8.1 6.0 + 2.1 4.1 EPS (cents) 4.59 6.10 (24.8) 7.95 1HFY2010 FY2009 NAV/share (cents) 36.16 51.38 (29.6) 51.38 *Half year ended September 30, 2009 **Half year ended September 30, 2008 ***Full year ended March 31, 2009 9
Revenue S$ m 350.0 328.7 300.0 250.0 200.0 150.0 118.0 CAGR: 40.7% 133.3 182.1 179.7-30.5% 124.9 Revenue decline in 1HFY2010 due mainly to the completion of 4 projects for Group s Construction business during period under review. 100.0 50.0 0.0 P2006 FY2007 FY2008 FY2009 1HFY2009 1HFY2010 P: Proforma results FY: Full year ended March 31 1HFY: First half year ended Sept 30 10
Revenue by Business Segment 350 330 Property 1% S$4.7m 310 290 270 250 Revenue (S$ m) 230 210 190 170 150 130 110 90 70 50 30 Property 4% S$4.8m Construction 96% S$113.2m Property 7% S$9.0m Construction 93% S$124.3m Property 3% S$5.6m Construction 97% S$176.5m Construction 99% S$324.0m Property 1% S$1.8m Construction 99% S$177.9m Property 2% S$2.6m Construction 98% S$122.3m Property Development and Management Construction P: Proforma results FY: Full year ended March 31 1HFY: First half year ended Sept 30 10 P2006 FY2007 FY2008 FY2009 1HFY2009 1HFY2010 11
Profit from Operations (Before Tax and Minority Interest) S$ m 24.0 Excluding fair value adjustments and items relating to convertible notes 19.0 P2006 to FY2009: 14.0 CAGR: 47.4% 22.1 +28% CAGR = 47.4% 1HFY2009 to 1HFY2010: 9.0 4.0 6.9 5.8 8.4 11.0 14.1 Profit from operations increased 28% P: Proforma results FY: Full year ended March 31 1H: First half year ended Sept 30-1.0 P2006 FY2007 FY2008 FY2009 1HFY2009 1HFY2010 12
Profit from Operations Profit from Operations 1HFY2010 1HFY2009 FY2009 FY2008 FY2007 P2006 All in Thousands Profit from Operation before Tax and MI 12,745 13,067 17,323 54,285 8,245 6,968 Excluding items below:- Add back/(less):- - (Gain)/loss from fair value adjusment of investment properties - 500 3,766 (43,461) (2,480) (98) - Fair value gain of embedded derivative on convertible notes - (3,950) (4,759) (4,100) - - - Amortisation of issuance costs on convertible notes 182 103 551 598 - - - Interest expenses - Imputed interest on convertible notes 729 1,315 5,501 1,099 - - - (Gain)/loss on redemption on convertible notes 487 - (246) - - - Adjusted Profit from Operations before tax and MI 14,143 11,035 22,136 8,421 5,765 6,870 13 13
Net Profit (after MI) for the Period/Year Attributable to Owners of the Company S$ m 20.0 Excluding fair value adjustments and items relating to convertible notes 18.0 16.0 14.0 12.0 10.0 CAGR: 49.9% 17.5 +32.6% P2006 to FY2009: CAGR = 49.9% 1HFY2009 to 1HFY2010: 8.0 6.0 4.0 2.0 0.0 6.4 11.4 5.2 4.1 8.6 P2006 FY2007 FY2008 FY2009 1HFY2009 1HFY2010 Net Profit (before MI) increased 32.6% P: Proforma results FY: Full Year ended March 31 1HFY: First half ended Sept 30 14
Net Profit (after MI) for the Period/Year Attributable to Owners of the Company Profit for the period/year attributable to owners of the Company 1HFY2010 1HFY2009 FY2009 FY2008 FY2007 P2006 All in Thousands Profit for the period/year attributable to owners of the Company 10,038 10,750 14,007 31,397 6,099 5,308 Excluding items below:- Add back/(less):- - (Gain)/loss from fair value adjusment of investment properties net of tax & minority interest - 415 2,448 (22,593) (1,954) (98) - Fair value gain of embedded derivative on convertible notes - (3,950) (4,759) (4,100) - - - Amortisation of issuance costs on convertible notes 182 103 551 598 - - - Interest expenses - imputed interest on convertible notes 729 1,315 5,501 1,099 - - - (Gain)/loss on redemption on convertible notes 487 - (246) - - - Adjusted Profit for the period/year attributable to owners of the Company 11,436 8,633 17,502 6,401 4,145 5, 210 15 15
Balance Sheet Highlights S$ m 1HFY2010* FY2009** Change (%) Current Assets 168.1 160.8 + 4.5 Current Liabilities 105.7 119.0 (11.2) Net Current Assets 62.3 41.9 + 48.7 Total Assets 312.2 314.5 (0.7) Total Liabilities 189.3 203.4 (6.9) Shareholders Equity Net Tangible Assets 103.7 90.6 14.5 122.9 111.1 10.6 *First half ended Sept 30, 2009 **Full year ended March 31, 2009 16
Debt Coverage S$ m 1HFY2010* FY2009** Total Borrowing Debts 86.0 102.7 Total Cash 59.5 62.4 Net Borrowings & Debt 26.5 40.3 Net Debt to Equity 0.22 0.36 *First half year ended Sept 30, 2009 **Full year ended March 31, 2009 17
Corporate Developments
Ongoing Construction Projects Turquoise at Sentosa Cove Marina Collection at Sentosa Cove Clifford Pier Hotel The Orange Grove Seascape at Sentosa Cove NUS University Town 19 19 19
Ongoing Construction Projects Project Name Contract Value (S$ m) Commencement Date Estimated Completion Date in 2010 Singapore: Clifford Pier Hotel 119.8 September 2007 October 2009 Orange Grove 52.3 January 2008 May 2010 Sentosa Cove (Turquoise) 64.8 January 2008 April 2010 Marina Collection at Sentosa Cove 126.8 April 2008 June 2010 Seascape 121.2 April 2008 July 2010 NUS University Town 83.4 June 2009 April 2011 Watten Residences 36.0 November, 2009 December 2011 20 20 20
Estimated Project Timeline Ongoing Construction Projects Clifford Pier Hotel Orange Grove Sentosa Cove (Turquoise) Marina Collection at Sentosa Cove Seascape NUS University Town Watten Residences FY2008 FY2009 FY2010 FY2011 FY2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 21 21 21
Track Record Completed Projects
Completed Construction Projects Public Sector*: Air Traffic Control Tower at Biggin Hill Choa Chu Kang Sports Complex Jalan Bahar SCDF Rescue Training Centre Nanyang Polytechnic The Frontier Community Place Tampines One Tanah Merah Ferry Terminal Primary Schools at Sengkang Anchor Green Primary School North Vista Primary School Private Sector*: International Business Park Montview Mustafa Shopping Centre extension One o 15 Marina Club Restoration of Far East Square The Berth by the Cove The Coast The Spectrum *Not exhaustive 23 23
Notable Public Sector Projects (Completed) Choa Chu Kang Sports Complex Air Traffic Control Tower at Biggin Hill The Frontier Community Place Nanyang Polytechnic Jalan Bahar SCDF Rescue Training Centre Tanah Merah Ferry Terminal 24 24 24
Notable Private Sector Projects (Completed) The Berth by the Cove The Spectrum Montview One o 15 Marina Club Mustafa Shopping Centre Extension Restoration of Far East Square Illoura (Old Holland Road) International Business Park 25 25 25 The Coast
Property Development
Ongoing Property Projects - Singapore Project Name Percentage Holdings Location Singapore: *JV Lincoln Suites 25% Khiang Guan, off Newton Rd **JV Freehold site at Mergui Road 35% Mergui Road * Joint venture with Koh Brothers Group, Heeton Holdings, and Lian Beng Group ** Joint venture with Multi Wealth (Singapore) Pte. Ltd. and LBH Pte. Ltd. 27 27 27
Lincoln Suites Soft launch held on October 20, 2009 Official launch on October 31, 2009 Well-received
Property Development - China China: Tianxing Riverfront Square in Tianjin - 36-storey commercial complex in the heart of Tianjin s business district - Developed and managed by our subsidiaries in Tianjin - Completed in June 1998 Liang Jing Ming Ju Phase 4 of 19,800 sq m - To commence upon approval by relevant authorities - Target to sell RMB6,000/sq m 29 29 29
Future Plans
Corporate Strategies Focus on Construction Business in Singapore Continue to tender for projects, in line with general Construction climate Pay greater emphasis to public sector construction activities Leverage on Group s strong track record in public sector projects, healthy balance sheet and low receivables risk Capitalise on Group s eligibility to tender for: - Public construction projects of unlimited value (certified A1 grading under CW01 category for general building by the BCA) - Up to S$85 million value worth of civil engineering contracts (certified A2 grading under CW02 category for general building by the BCA) 31 31
Corporate Strategies Maintain Property Development Business in Singapore and PRC Adopt prudent approach for property development Form JVs with reputable partners In the PRC: development via JV on Phase 4 of Liang Jing Ming Ju 32 32
Outlook
Outlook Construction continues to demonstrate resilience According to the forecast published by the Building and Construction Authority ('BCA") on 1 July 2009, the total construction demand in 2009 would range from S$18 billion to S$24 billion Average annual demand for year 2010 to 2011 will range from S$20 billion to S$27 billion. Property receives positive sentiments URA statistics released in July 2009 show that developers sold 1,825 units of new homes in June this year This is up from 1,673 units in May, with monthly take-up rate surpassing the high of 1,731 units recorded in August 2007 34 34 34
Commentary Cautiously optimistic on the outlook of the Group s Construction business Noted the recent improvement in sentiment of the residential Property market in Singapore Will continue to monitor market closely 35 35
Thank You