Untitled - Swissco Holdings Limited

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CHAIRMAN’S STATEMENT Dear Fellow Shareholders, I am pleased to present the Annual Report of our Company for the financial year ended 31 December 2005 (“FY2005”), the first full financial year of our Company as a listed corporation following our Initial Public Offering (IPO) and listing on Singapore Exchange Securities Trading <strong>Limited</strong> and Automated Quotation System (SGX-SESDAQ) in November 2004. Business Review It is gratifying for me to report that for FY2005, we have again been able to maintain our profitable performance with higher turnover and profit. Fueled by the buoyant marine and Oil and Gas industries, the demand for the charters of our newer offshore vessels was stronger compared with FY2004. Vessel disposal continued to contribute significantly to our profitability as the Group capitalized on the robust used tonnage market to dispose some of its vessels and to replace them with newer specialized vessels in line with our Group’s fleet expansion and realignment plans. Our Group’s marine logistics support business to the maritime and Oil and Gas industries enjoyed healthy performance. As newer and higher value offshore vessels joined the operating fleet, our marine logistics support business saw a significant increase in revenue. As we work towards operating an optimal fleet to meet market demand, our Group will continue to seize the opportunity to dispose vessels to realign the fleet. With the specialized offshore fleet, the Group will be able to generate higher charter earnings in the current bullish market. The Group’s other core business of ship repair and maintenance also posted higher turnover and profit. With a resurgence of activities in the marine and shipping industry, shipowners are prepared to increase their outlay to repair and maintain their vessels. Tighter credit and cost control policies set by the Group have helped to improve the financial performance of the ship repair and maintenance business. Contributions from our associated companies have continued to play a significant role to the Group’s performance. Our associated companies have undergone a restructuring exercise last year to streamline their operations. They are principally offering turnkey engineering services and solutions to the Oil and Gas industry as well as ship chartering. The Group’s vessels are also chartered to our associated companies and utilized by them to service their clients. The past year has seen the Group’s commitment on fleet expansion and realignment to meet the growing demand of the Oil and Gas industry with orders for 8 new offshore vessels. These new buildings are scheduled for deliveries in FY2006 and FY2007. 2
Dividend In the light of our Group’s exceptional performance for FY2005, I am pleased to announce that the Board of Directors is recommending a maiden cash dividend of one cent per share comprising an ordinary dividend of 0.2 cent per share and a special dividend of 0.8 cent per share for the full year ended 31 December 2005. The payment of dividend is intended to reward our loyal shareholders who have supported the Group over the past year. Strategic Growth Directions Our Group will continue to focus on laying the foundation for future expansion in growing our core businesses and generating organic growth. We firmly believe that the key factors for our success would be our ability to stay customer-focused and resultsoriented as well as being a niche player in the competitive marine logistics support business. Being a pioneer in servicing the Out Port Limit (OPL) business, we will endeavor to widen our market share going forward. However, our primary focus will be to concentrate and expand in the offshore support vessels in Oil and Gas industry. With this industry remaining buoyant, we believe our growth will be fueled by the industry’s demand. Consequently, we will continue to build up our offshore support vessel fleet to strive to reach an optimal operating level in line with our fleet renewal and realignment policy. During the past year, the Group has explored opportunities to expand into new markets, seek strategic alliances and increase the fleet size especially for more specialised offshore support vessels capable to offer a wider range of services required by the Oil and Gas industry. I am pleased to say that we have achieved some degree of success in this area. The Group will also be exploring with potential business partners to offer the Group’s services to the maritime and Oil and Gas industries in other geographical areas to drive future growth of our businesses. Business Outlook As part of our fleet expansion programme and in line with our fleet renewal policy, the Group is scheduled to take delivery of 7 vessels in FY2006. The new vessels comprise 2 barges and 5 offshore boats built in China and in our own yard in Singapore. The new buildings are specialized vessels and are customized to clients’ special requirements. These vessels are able to command better charter rates due to the wider and versatile range of services they can perform. We expect better contributions from these new vessels progressively as and when they join the fleet. Pivotal to the success of our business would be operational efficiencies and vessel utilization. In this aspect, our Group will continually strive to achieve greater cost and operational efficiencies and at the same time, maximise vessels’ utilization. In line with these objectives, we will continue to institute tighter cost and credit control programmes in the operations of our Group. Our Group expects the marine industry to remain buoyant in the current year. Moreover, with oil prices at current level, growth in the Oil and Gas sector would likely be sustained. Consequently, we expect demand for offshore support vessels and barges as well as ship repairs and maintenance to continue to be robust in FY2006. Hence, our Group looks forward to yet another profitable year. Share Price It gives me great pleasure to report that our share price had a credible performance during the year. From the offering price of 28 cents offered at the Initial Public Offer, it ended the year at 34.5 cents, an increase of 23.2%. Consequently, the market capitalization of our Company increased to S$50.6 million at the end of the financial year. As at the date of the Annual Report, the share price of the Company is 46 cents or 64.3% increase from the IPO price. This translates to a market capitalization of our Company of S$67.5 million. Share Placement At last year’s Annual General Meeting, you have given your Directors the mandate to issue new shares up to a maximum of 20% of the share capital of the Company. I am glad to report that your directors have used this mandate to issue 29 million new shares at 35.5 cents to selected investors. The placement of new shares has raised a net amount of S$9.9 million which will be used to finance the acquisition of the new vessels and for working capital. The placement has also helped to increase the liquidity of our shares and has improved trading. It has also widened our pool of shareholders to include several leading institutional investors. This exercise has generated attention and greater interests in our shares among the investment community. Acknowledgement and Appreciation It remains for me, on behalf of the Board, to thank our management and staff for their commitment, efforts and contribution during the year. We would also like to thank and acknowledge the continuing support of our customers, shareholders, business partners and suppliers. We look forward to their ongoing contributions and support in the coming year as we progress with the growth of our Group. Yeo Chong Lin Chairman 3
Page 2 and 3: CORPORATE MILESTONES 1970 Sea Well
Page 6 and 7: CORPORATE PROFILE Our Customers •
Page 8 and 9: OUR HISTORY It started back in 1970
Page 10 and 11: BOARD OF DIRECTORS Mr Phillip Chan
Page 12 and 13: KEY MANAGEMENT Mr E K Lim Mr Koh Ba
Page 14 and 15: CORPORATE STRUCTURE Swissco Interna
Page 16 and 17: OUR VESSELS Swissco Star Swissco 48
Page 18 and 19: Corporate Governance Report 17 Dire
Page 20 and 21: Corporate Governance Report Remuner
Page 22 and 23: DIRECTORS’ REPORT The directors p
Page 24 and 25: DIRECTORS’ REPORT Share Options (
Page 26 and 27: DIRECTORS’ REPORT Audit Committee
Page 28 and 29: AUDITORS’ REPORT To The Members o
Page 30 and 31: BALANCE SHEETS As at 31 December 20
Page 32 and 33: CONSOLIDATED CASH FLOW STATEMENT Fo
Page 34 and 35: NOTES TO THE FINANCIAL STATEMENTS F
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NOTES TO THE FINANCIAL STATEMENTS F
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STATISTICS OF SHAREHOLDINGS As at 2
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NOTICE OF SECOND ANNUAL GENERAL MEE
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NOTES 1. A member entitled to atten
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Untitled - Swissco Holdings Limited

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