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Investor Relations

Chairman Statement

Dear Valued Shareholders,

It is with great pleasure that I share with you our achievements in FY2008. Since our listing in 2004, we have successfully grown our revenue from S$8.5million in FY2004 to S$52.9million in FY2008; established ourselves as a niche player in the oil and gas industry with a steady growth of our specialized vessel strength and enjoyed profitability from our operations. These achievements are, I am proud to stress, the work of a great, committed and dedicated team with a shared vision riding on strong market demand.

Besides these financial achievements, we are also committed to maintaining good corporate governance practices and highest standards of corporate transparency and during the year had put in place additional procedures to enhance compliance of the listing regulations.

Financial Performance

The oil and gas continued its robust and buoyant growth throughout FY2008 slowing only towards the end of the fourth quarter. Strong demand led to better utilization rates and with an increased fleet strength from 26 at the end of FY2007 to 32 at the end of FY2008, the Group was able to achieve increases in both revenue and net profit in FY2008.

The Group registered a 69.6% growth in turnover to S$52.9million in FY2008 from FY2007. Gross profit rose by 77.2% from S$15.8million to S$28.0 million.

Net profit achieved in FY2008 was S$23.6million which was lower than FY2007 of S$40.2million. The net profit in FY2007 included a capital gain of S$29.4million arising from a partial divestment of the Group's long-time held investment.

The marine logistics business remains the Group's core revenue generator registering a turnover of S$47.2million in FY2008 (FY2007: S$26.5million), which is a marked improvement of 78.1% over FY2007. Our fleet renewal and expansion program achieved a larger and well balanced fleet mix in FY2008 contributing to higher revenue and profitability.

Our ship repair and maintenance business saw an increase in turnover from S$4.7million in FY2007 to S$5.7million in FY2008. The Group managed to secure higher value jobs in the marine industry during FY2008 that contributed to higher earnings.

I am pleased that the Group has performed well in 2008 but in the light of the worst global economic crisis, it is likely to face greater challenges in the years ahead.

Dividends

The Board will be recommending a first and final taxexempt (1-tier) dividend of 1.0 cent per ordinary share, to be approved at the forthcoming Annual General Meeting on 30 April 2009.

Growth Strategy

The severe adverse impact of the current financial turmoil brings with it significant challenges to the world economy. The configuration of our current and planned fleet size in FY2009 and FY2010 will enable us to meet the dynamic demands of our customers. We will also continue exploring opportunities to expand our business with strategic partners to enlarge our market share by tapping into new markets.

Business Outlook

The current global economic upheavals will pose additional challenges for the Group in 2009. To remain competitive in this environment, we will continue to focus and improve on our cost efficiency measures and efforts as well as enhance our operational productivity. We expect to take delivery of 15 new offshore support vessels in FY2009 and another 3 in FY2010. No new order for vessel has been contracted since the end of FY2008 as we are nearing our optimal fleet size. The new deliveries in FY2009/2010 together with our existing fleet will further enhance our vessel mix and strengthen our position as a niche player in the oil and gas sector.

Acknowledgement and Appreciation

On behalf of the Board of Directors, I wish to express our appreciation to the management and staff for their hard work and dedication to the Group. We are grateful to all our customers, bankers, business associates and suppliers for their unwavering support and we look forward to a closer working partnership with them in years ahead.

In conclusion, we thank all shareholders for their support and confidence in our Group and together we will work towards steering the Group to greater heights.

Yeo Chong Lin
Chairman