Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2015 Earnings Presentation
25 slides from Southern Cross Electrical Engineering's earnings presentation, Feb 25, 2015
Slide 1: Interim Results Presentation Half Year Ended 31 December 2014
For personal use only Interim Results Presentation Half Year Ended 31 December 2014 25 February 2015
Slide 2: About SCEE
About SCEE For personal use only Leading provider of specialised electrical Project life cycle support and instrumentation services design and construction of high voltage Delivers services to resource projects across power line distribution, switchyards and Australia and overseas throughout the sub
Slide 3: Exposure to six sectors
Exposure to six sectors For personal use only Iron ore Minerals & metals LNG CSG Coal Power generation Australia Australia & overseas Australia Australia Australia Australia 2
Slide 4: Highlights
Highlights For personal use only Half year revenue of $142.0m up 28% on PCP; NPAT of $4.1m down 34% on PCP Financial Challenging market conditions continue to impact margins Strong balance sheet with $32.2m of net cash at 31 December 2014 Operations in period completed without a Lost Time Injury Ord
Slide 5: HY projects
For personal use only HY 15 projects 4
Slide 6: Key contract wins
Key contract wins For personal use only CITIC Pacific Sino Iron Awarded approximately $80m of works on the Sino Iron Project at Cape Preston Activity commenced during the period and will ramp up in H2 15 and continue into FY16 BHP Billiton Iron Ore Yarnima Awarded over $25m of E&I works at the
Slide 7: Half year financial results
Half year financial results For personal use only HY15 HY14 Change Activity levels were high during the $m $m % period with a 28% increase in revenue Revenue 142.0 110.7 28% But challenging market conditions continued to impact margins Gross profit 22.2 26.0 (15%) HY14 gross margins reflected the Gr
Slide 8: Revenues by operating division
Revenues by operating division For personal use only Main Contributors: SCEE Infrastructure BHP Billiton Yarnima Power Station BHP Billiton Iron Ore Sustaining Capital SCEE Construction Rio Tinto Cape Lambert Port B Phase B Civmec Nammuldi KSJV – Bechtel Australia Pacific LNG SCEE Services
Slide 9: Balance sheet
Balance sheet For personal use only Dec 14 Jun 14 $m $m Strong balance sheet throughout period Current assets 95.6 98.6 Cash of $34.0m at 31 December 2014 with a further $13.6m of client receivables due Non current assets 45.7 48.0 prior to period end received early January Total assets 141.2 146.6
Slide 10: Cashflow
For personal use only Cashflow 9
Slide 11: Financial trends
For personal use only Financial trends 10
Slide 12: Health, safety and people
Health, safety and people For personal use only Lost Time Incident free in the period, over ten years LTI free in Australia Reflective of the proactive safety culture across the whole of SCEE from the Board to our project teams Over 750 employees at 31 December 2014 as key H1 projects completed and
Slide 13: Order book
Order book For personal use only Order book at 31 December 2014 of $110m excluding work under recurring framework agreements A further $20m of orders have been secured post period end Over $50m of order book is for FY16 performance Business development and tendering activity remains high but pool of
Slide 14: Market conditions
Market conditions For personal use only Continuation of the challenging market conditions that emerged during 2013 Tender process to secure available work is increasingly competitive Clients remain commercially focussed with price a key driver in awards Commodity price weakness has seen the postpone
Slide 15: Iron Ore Capital
Iron Ore Capital For personal use only Pipeline of available work has reduced but expected to remain a key revenue contributor Opportunity for growth on Sino Iron as the project progresses New mine developments will be required by Rio and BHP to maintain their forecast production levels 14
Slide 16: Iron Ore Sustaining Capital and Operations and Maintenance
Iron Ore Sustaining Capital and Operations and Maintenance For personal use only SCEE strongly positioned with Rio Tinto, BHP and Sino Iron for sustaining capital and operations phases - E&I component of spend increases from 3-5% in capital phase to 12-15% in later phases BHP Iron Ore Sustaining Cap
Slide 17: LNG and CSG
LNG and CSG For personal use only LNG construction phase to continue into FY17 KSJV currently working on APLNG and GLNG with scope for further growth Targeting secondary opportunities on other LNG plants Positioning for operations and maintenance workflow over long term as LNG plants completed Secon
Slide 18: Mining
Mining For personal use only Base metals remains depressed and is being treated as a spot market with project bid as they arise Bidding identified opportunities in East Coast coal market (eg Adani) Selectively bidding for international construction work 17
Slide 19: Outlook
Outlook For personal use only Activity in early H2 has been low as a result of completion of key H1 projects and slower than anticipated ramp up of new projects Margins expected to remain highly competitive for foreseeable future Market conditions and the risk of further deterioration make full year
Slide 20: Strategy
Strategy For personal use only Focused on substantially increasing recurring revenues from operations & maintenance and sustaining capital over three to five years through organic growth and acquisition opportunities (targeting $100m-$150m p.a. by FY16) Monitoring and evaluating potential growth and
Slide 21: Overheads
Overheads For personal use only Overheads in the period were down 8% from $13.9m in PCP to $12.8m despite a 28% increase in revenue Efficiency measures have been ongoing for 18 months since market conditions changed with overheads in Q2 FY15 22% lower than in Q1 FY14 Continue to target further reduc
Slide 22: Management changes
Management changes For personal use only Managing Director and CEO Simon High stepping down from the role The Board has commenced a formal search process for a replacement Mr High to remain in the role until an appointment is made Strong management team in place and will ensure continuity during the
Slide 23: Conclusion
Conclusion For personal use only Market conditions remained challenging during the period and are expected to continue Available pool of construction work has reduced but operations & maintenance and sustaining capital opportunities are increasing Significant overhead reductions achieved and managin
Slide 24: Non-IFRS financial information
Non-IFRS financial information For personal use only SCEE’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in accordance with IFRS and there
Slide 25: Disclaimer
Disclaimer For personal use only Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Southern Cross Electrical Engineering Limited’s current intentions,
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