Yongnam Holdings Limited 1HFY2009 Results Presentation
Contents Our Business Corporate Updates 1HFY2009 Financial Performance Prospects and Market Outlook Growth Strategies and Plans Key Highlights 2
Our Business We are A well-established structural steel contractor and specialist civil engineering solutions provider Structural Steelworks One of the largest steel fabrication facilities in Southeast Asia Nearest competitor is one fifth the size of Yongnam On time delivery and with quality S1 category accreditation from Singapore Structural Steel Society Specialist Civil Engineering Modular Strutting System meets increasingly stringent design and project requirements Approximately 90,000 tons of strutting assets High replacement cost of struts is a major barrier to entry 3
Our Business Over 30 years of experience in steel fabrication Long established relationships with major customers, who are reputable contractors: Takenaka Corporation Taisei Corporation Obayashi Corporation Penta Ocean Shimizu Corporation Dragages Singapore Sembawang Engineering & Construction Ltd Samsung Corporation Ssangyong Engineering & Construction Co Ltd Hyundai Engineering & Construction Ltd Daelim Industrial Co. Ltd Woh Hup Pte Ltd 4
Regional Offices China INDIA Middle East Thailand Malaysia Hong Kong Singapore - Yongnam Engineering & Construction (Pte) Ltd - YNE Project Engineering Pte Ltd Malaysia - Yongnam Engineering Sdn Bhd - Jiwa Harmoni Offshore Sdn Bhd Hong Kong - Yongnam Engineering (HK) Ltd Thailand Singapore - Yongnam Engineering & Construction (Thailand) Ltd China - Yongnam Steel Work System Engineering (Shanghai) Co., Ltd Middle East - Yongnam Engineering & Construction (Pte) Ltd, Dubai Branch India - Project Office (Delhi) 5
Regional Projects Norway Pakistan Middle East India China Thailand Malaysia Korea Hong Kong Brunei Singapore Japan Philippines Projects undertaken across the region: Singapore Malaysia Middle East China Norway Brunei Philippines Thailand Japan Korea Hong Kong Pakistan India 6
Structural Steelworks Track Record Marina Bay Sands Integrated Resort, Singapore New Delhi International Airport, India Orchard Turn, Singapore Dubai Metro Rail, Dubai 7
Structural Steelworks Facilities Singapore: Total Land Area: Approximately 76,000 m 2 Workshop Covered Area: 20,250 m 2 Capacity (Normal Steel Structure): 3,000 Tons per month Malaysia (Nusajaya, Johor)*: Total Land Area: Approximately 109,103 m 2 Workshop Covered Area: 28,900 m 2 Capacity (Normal Steel Structure): 3,500 Tons per month *New fabrication factory commenced operations in September 2008 Total Staff Strength: Approximately 1,450 8
Specialist Civil Engineering Track Record Marina Bay Sands Integrated Resort, Singapore Farrer Station, Circle Line, Singapore 9
Completed/Ongoing Works CD CD CD PC SS SS SS CD PC PC PC PC PC PC PC SS PC SS CD PC Pre cast Projects SS Structural Steelwork CD Civil Defense Doors Civil Eng Works 10
Corporate Updates
Corporate Updates MBS IR Total of 8 contracts worth S$302 million First two contracts completed Remaining 6 contracts: Project Expected Completion Date South Podium End September 2009 North Podium End November 2009 ArtScience Museum End January 2010 View Corridors & Canopies End January 2010 Lion Garden Bridge & Cooling Tower Structure End January 2010 SkyPark End January 2010 12
MBS IR Arts Science Museum Lift core Top surface framing structure Bottom surface framing structure Lookout framing Floor structure Staircase structure 13
MBS IR Skypark Sky Park 64m 343m Heavy Lifting Component Bridge 1 North Cantilever Bridge 2 Tower 3 Box Girder 14
Ongoing Projects at MBS IR Cooling Towers Main Con - Yongnam Steel Wt - 507 tons Lion Garden Bridge Main Con - Yongnam Steel Wt - 480 tons Sky Park Main Con JFE Yongnam JV Steel Wt - 7,900 tons Arts Science Museum Main Con - Penta Ocean Steel Wt - 5,113 tons North Podium Steel Decking & Strutting Main Con Sembcorp Punj Llyods View Corridor Bridges Steel Wt - 17,300 tons South Podium Excavation, & Large Canopies Decking & Strutting Main Con Yongnam Main Con KTC Yongnam JV Steel Wt 1,137 tons 15
Corporate Updates - MCE Marina Coastal Expressway C485 contract worth S$185.5 million single largest contract won by Yongnam todate Temporary steel pipe pile cofferdam, steel waling and strutting works Project scheduled for completion by June 2013 7% completed C487 contract valued at approx S$53 million Support construction works by main contractor, Daelim Industrial Co. Ltd, through the lease supply, fabrication, installation and removal of temporary waler, strut, splay and bracing Contract works scheduled for commencement in October 2009 and completion by end 2013 C485 C485 C483 contract valued at approx S$23 million The installation and the eventual extraction of the temporary steel interlocking pipe pile earth retaining wall for the 950-metre vehicular tunnel structure Contract works just commenced and scheduled for completion by June 2012 Artist s Impression 16
Corporate Updates Vista Xchange Contract worth S$88 million Construction of the Integrated Civic, Cultural, Retail and Entertainment Hub at Vista Xchange, located at one-north Construction commenced end of 2008; scheduled for completion by January 2011 10% completed Artist s Impression New Delhi International Airport Completed in June 2009 17
Corporate Updates Dubai Metro Rail Dubai Metro Rail Completed: Structural steelworks and strutting works for 19 overground/underground stations in March 2009 for both Red and Green Lines Ongoing*: Won new contract worth AED 13.3 million in April 2009 for the Entrance Canopies for two underground stations for Red Line 80% completed Won two new contracts worth AED 84.8 million in April 2009 for Green Line: AED 74.7 million contract for structural steelworks for 12 overground stations 20% completed AED 10.1 million contract for structural steelworks for 6 underground stations 40% completed * Three new contracts secured in April 2009 to be completed by end 2009 18
1HFY2009 Financial Performance
Financial Highlights 1HFY2009 Highlights: Another quarter of commendable results Builds on strong first quarter performance Topline growth of 37.0% to S$183.2 million Net profit jumps 53.8% to S$20.7 million Structural Steelworks remains as top revenue contributor and revenue gainer Net debt to equity ratio remains low at 0.7 times as at end June 2009 Shareholders equity improves to S$166.9 million as at end June 2009 Strong order book maintained S$497 million as at end June 2009 Period ended June 30 20
Financial Highlights 2QFY2008 2QFY2009 Change (%) 1HFY2008 1HFY2009 Change (%) Revenue (S$ m) 86.3 86.4 + 0.1 133.8 183.2 + 37.0 Gross Profit (S$ m) Profit after tax (S$ m) 18.0 21.0 + 16.5 31.2 44.3 + 42.0 8.7 10.6 +22.0 13.5 20.7 +53.8 EPS (Basic) (Singapore 0.71 0.86 + 21.1 1.11 1.70 + 53.2 cents) (1) NAV Per Share (Singapore - - - 12.14 13.64 + 12.4 cents) (2) (1) EPS per share was computed based on the weighted average number of shares of 1,223,722,368 for 2QFY2009 (2QFY2008: 1,217,462,983) and 1,221,480,176 for 1HFY2009 (1HFY2008: 1,217,442,983) (2) NAV per share as at December 31, 2008 and June 30, 2009 respectively Period ended June 30 21
Balance Sheet Highlights Dec 31 2008 June 30 2009 Work-in-progress (S$ m) 120.9 139.0 Debtors (S$ m) 36.5 41.7 Cash & Bank Balances (S$ m) 40.5 17.9 Borrowings (S$ m) 123.8 135.2 Net Borrowings (S$ m) 83.3 117.3 Shareholders Funds (S$ m) 147.7 166.9 Order Book (S$ m) 504.0 497.0 Period ended June 30 22
Revenue Growth Notwithstanding continuing global economic slowdown: S$ m 0.1% Period ended June 30 37.0% - 2QFY2009 Revenue 0.1%: Structural Steelworks increased 15.9% to S$69.9 million from 2QFY2008 mainly due to: Contributions from projects such as: Marina Bay Sands Integrated Resort; New Delhi International Airport; Integrated Civic, Cultural, Retail and Entertainment hub at Vista Xchange, one-north. Specialist Civil Engineering declined 36.3% to S$16.5 million from 2QFY2008 mainly due to: Reduced activities at Marina Bay Sands Integrated Resort; Partly offset by the commencement of the Marina Coastal Expressway C485 project the Group s single largest contract to-date at S$185.5 million. 23
Gross Profit S$ m 16.5% 42.0% 2QFY2009 Gross Profit 16.5% Due mainly to: Improved margins: 20.9% in 2QFY2008 to 24.3% in 2QFY2009 Period ended June 30 24
Profit after Tax Consequently, profit after tax 22.0% S$ m 53.8% 22.0% Period ended June 30 25
Revenue by Business Activity 2QFY2009 Specialist Civil Engineering S$16.5m 19.1% Specialist Civil Engineering S$25.9m 30.0% 2QFY2008 80.9% Structural Steelworks S$69.9m 70.0% Structural Steelworks S$60.3m Period ended June 30 26
Order Book Strong order book of S$497 million as at June 30, 2009 - Boosted by new contract wins in 1HFY2009: Marina Coast Expressway (C487 and C483 contracts); 8 th contract for the Marina Bay Sands TM IR; and Three new contracts for the Dubai Metro Red and Green Lines. Period ended June 30 27
Prospects and Market Outlook
Local Prospects Committed support from Government through to 2011: Government ramping up construction spending S$18 billion to S$20 billion worth of contracts to be injected into economy this year Another S$15 to S$17 billion to be pumped in for building and infrastructure projects in 2010 and 2011 each Major public projects to be awarded this year include the National Research Foundation s research campus, JTC Corp s International School Campus at Tampines, and support facilities for Gardens by the Bay at Marina South Construction sector holds up in 2Q2009: Momentum in the construction sector picked up strongly after a moderation in the first quarter The construction sector grew by 32.7% compared to 1Q2009 s 9.6%, driven by the growth in both public and private construction activities Business Times, August 11, 2009 Straits Times, March 24, 2009 Construction sector shows least pessimism The construction sector emerged the star performer for a second consecutive quarter 29
Regional Prospects Middle East: The UAE is carrying out projects in Construction and other sectors with total value of approx. AED3.4 trillion ($930 bn) Every country in the region have plans for ambitious rail projects Qatar and Kuwait are spending around $10 billion each; United Arab Emirates is forking out around $20 billion; and Saudi Arabia plans to spend $15 billion to increase the size of its rail network nearly five-fold. $930bn worth of projects underway in the UAE Arabian Business, July 24, 2009 India: Govt intends to spend about US$500 bn on India s infrastructure in the five years to 2012 Amongst the budget: US$79 billion will be spent on highways and bridges US$65 billion will be spent on railways India to pour billions into upgrading infrastructure The Straits Times, July 4, 2009 Making tracks: European companies hope to prosper from railway mania in the Middle East Economist, April 23, 2009 30
Potential Projects Structural Steelworks Location Expected Commencement Government $ Mil Non-Government $ Mil Singapore Overseas 2010 163.0 80.0 2011 60.0 57.0 2009 Nil 60.0 2010 150.0 Nil Total 373.0 197.0 Specialist Civil Engineering Location Expected Commencement Government $ Mil Non-Government $ Mil Singapore 2009 100.0 Nil 2010 400.0 Nil Total 500.0 Nil Contracts for infrastructural developments such as: MRT Downtown Line Turbine Building India Singapore Sports Hub Airport Terminal Building Oman Marina Coastal Expressway Projects announced by Government (not included above): MRT Thomson Line MRT Eastern Line North-south Expressway 31
Growth Strategies and Plans
Growth Strategies and Plans Remain focused on the two core businesses Structural Steelworks and Specialist Civil Engineering Leverage on established brand name and strong foothold in the Singapore market Continue to explore growth potential in Middle East and India opportunistically 33
Thank You