Yongnam Holdings Limited FY2009 Results Presentation
Contents Our Business Corporate Updates FY2009 Financial Performance Prospects and Market Outlook Growth Strategies and Plans 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 134,000 tons of strutting assets and pipe piles Strong track record and high replacement cost of struts are major barriers 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 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 Total Staff Strength: Approximately 1,600 8
Specialist Civil Engineering Track Record Marina Bay Sands Integrated Resort, Singapore Farrer Station, Circle Line, Singapore 9
Specialist Civil Engineering Track Record Marina Coastal Expressway
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 11
Corporate Updates
Corporate Updates MBS IR Total of 9 contracts worth S$342 million First 3 contracts completed Remaining 6 contracts: Project Expected Completion Date North Podium End March 2010 ArtScience Museum End April 2010 View Corridors & Canopies End March 2010 Lion Garden Bridge & Cooling Tower Structure End May 2010 SkyPark End April 2010 Crystal Pavilions End October 2010 13
Ongoing Projects at MBS IR Cooling Towers Main Con - Yongnam Steel Wt - 507 tons Arts Science Museum Main Con - Penta Ocean Steel Wt - 5,113 tons Lion Garden Bridge Main Con - Yongnam Steel Wt - 480 tons Sky Park Main Con JFE Yongnam JV Steel Wt - 7,900 tons Crystal Pavilions Main Con Yongnam Steel Wt - 2,162 tons North Podium Steel Decking & Strutting Main Con Sembcorp Punj Llyods Steel Wt - 17,300 tons View Corridor Bridges & Large Canopies Main Con Yongnam Steel Wt 1,137 tons 14
MBS IR Arts Science Museum
MBS IR Skypark Sky Park 64m 343m Heavy Lifting Component Bridge 1 North Cantilever Tower 3 Box Girder Bridge 2 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 Phase I Construction commenced end of 2008 and completed Phase II Construction expected to commence in March 2010 and scheduled for completion by January 2011 13% completed Artist s Impression New Delhi International Airport Completed in June 2009 17
MBS IR Garden by the Bay Design, supply and construct structural steelworks for: Cool Dry Conservatory Building Cool Moist Conservatory Building Main Contractor Woh Hup Private Limited Contract value approx S$58.2 million 4.4% completed Expected completion October 2010 18
Corporate Updates - MCE Marina Coastal Expressway 4 Contracts worth total of S$302 million C485 contract worth S$204.5 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 21% 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 to commence in March 2010 and completion by end 2013 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 commenced in August 2009 and scheduled for completion by June 2012 C485 C486 contract valued at approx S$21.5 million Supply, installation and removal of steel walers and struts Contract awarded in November 2009 and scheduled for completion by September 2012 Artist s Impression 19
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 100% 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 76% completed AED 10.1 million contract for structural steelworks for 6 underground stations 75% completed Expected completion by April 2010 20
FY2009 Financial Performance
Financial Highlights Building on record performance : 4 th year of record performance, since FY2006 Group revenue 2.7% to S$346.8 million Gross profit margin 14.8% to 23.2% in FY2009 Net profit before tax 33.0% to S$48.8 million Structural Steelworks marginally to S$256.8 million Specialist Civil Engineering 7.8% to S$89.9 million Shareholders equity 27.0% to S$187.6 million as at end Dec 2009 Strong order book S$492 million as at end Dec 2009 Proposed 0.5 Singapore cent one-tier tax exempt final dividend Period ended December 31 22
Financial Highlights FY2008 FY2009 Change (%) Revenue (S$ m) 337.6 346.8 +2.7 Gross Profit (S$ m) 68.1 80.4 + 18.0 Profit before tax (S$ m) 36.7 48.8 +33.0 EPS (Basic) (Singapore 2.79 3.27 + 17.2 cents) (1) NAV Per Share (Singapore cents) (2) 12.14 15.22 + 25.4 (1) EPS per share was computed based on the weighted average number of shares of 1,226,033,071 for FY2009 (FY2008: 1,217,462,983) (2) NAV per share as at December 31, 2009 and December 31, 2008 respectively Period ended December 31 23
Balance Sheet Highlights Dec 31 2008 Dec 31 2009 Change (%) Net Work-inprogress (S$ m) 89.6 93.0 +3.8 Debtors (S$ m) 36.5 47.8 +23.6 Cash (S$ m) Borrowings (S$ m) 40.5 123.8 18.7 159.1-53.8 +28.5 Gearing (times) 0.56 0.75 +33.9 Shareholders 147.7 187.6 +27.0 Funds (S$ m) Period ended December 31 24
Revenue S$ m CAGR 42.7% Notwithstanding continuing global economic slowdown: - FY2009 Revenue 2.7%: Structural Steelworks increased marginally to S$256.8 million mainly due to: Increased activities and higher contributions from the Group s various projects at the Marina Bay Sands Integrated Resort and Vista Xchange at One North Specialist Civil Engineering increased 7.8% to S$89.9 million mainly due to: The Group s four contracts for the Marina Coastal Expressway Period ended December 31 25
Revenue by Business Activity FY2008 FY2009 Specialist Civil Engineering S$83.4m Specialist Civil Engineering S$89.9m Structural Steelworks S$254.2m Structural Steelworks S$256.8m Period ended December 31 26
Gross Profit & Margin S$ m Gross Profit 18.0% CAGR 56.5% 20.2% 23.2% Due mainly to: Improved margins : 23.2% in FY2009 compared to 20.2% in FY2008 Increasing contributions from both Structural Steelworks and Specialist Civil Engineering segments Period ended December 31 27
Profit before Tax Consequently, profit before tax 33.0% S$ m CAGR 189.0% Period ended December 31 28
Order Book Strong order book of S$492 million as at December 31, 2009-62% expected to complete by FY2010 - Specialist Civil Engineering increasing revenue contribution compared to FY2009 Period ended December 31 29
Prospects and Market Outlook
Market Prospects : Singapore Government will continue to invest in infrastructure works : Government ramping up construction spending (1) Value of construction contracts to be awarded this year will be between S$21 27 billion, and between S$18 25 billion for 2011 and 2012 Public sector works will include large public infrastructure projects such as the MRT Downtown Line Phase 2 and various road works Construction industry can look forward to more tendering opportunities in building projects, including major industrial projects such as the LNG Terminal, Fusionopolis 2A and Seletar Aerospace Park Construction is fastest growing sector 2 years in a row (2) : Construction grew from 3.7% of GDP in 2005 to 5.1% in 2008 Sustained level of construction demand expected over the next two to three years Sector employed 385,200 workers (12.8% of Singapore workforce) (1) Straits Times, Jan 13, 2010. Business Times, Jan 14, 2010 (2) Today, Feb 22, 2010 31
Market Prospects : Regional Hong Kong: HK Budget 2010-11 : government committed to investing in infrastructure Estimated capital works expenditure for 2010-2011 will increase to HK$49.6 billion (from HK$45.1 billion in 2009-2010) Capital works expenditure for each of the next few years will be at an all time high of over HK$50 billion MTR projects including : Shenzhen Metro Line 4 Phase 2, West Island Line, South Island Line (East), Shatin to Central Link and Kwun Tung Line Extension India: India 2010-11 Budget : government has renewed sense of optimism over the country s growth, having weathered the crisis and is now in a better position than it was a year ago Government remains committed to investing in infrastructure Rs 173,552 crore (approx S$53 billion) for infrastructure development 32
Potential Projects Structural Steelworks Location Expected Commencement Government $ Mil Non-Government $ Mil Singapore Overseas 2010 163.0 65.8 2011 70.0 108.3 2010 198.0 460.6 2011 Nil 42.5 Total 431.0 677.2 Specialist Civil Engineering Location Expected Commencement Government $ Mil Non-Government $ Mil Singapore 2010 121.0 Nil 2011 131.0 Nil Overseas 2010 50.0 Nil Total 302.0 Nil Contracts for infrastructural developments such as: MRT Downtown Line Singapore Sports Hub Infrastructure Oman Commercial Saudi Arabia & Abu Dhabi Marina Coastal Expressway Projects announced by Government (not included above): MRT Thomson Line MRT Eastern Line 33
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 projects in Hong Kong, Abu Dhabi, Saudi Arabia, Oman and India 35
Thank You