Hilong Holding Ltd. · HKEX:1623
Hilong — H1 2016 Earnings Presentation
20 slides from Hilong's earnings presentation, August 2016
Slide 1: 2016 Interim Results Presentation
2016 Interim Results Presentation August 2016
Slide 2: Disclaimer
Disclaimer The presentation material contains forward-looking statements. Such forward-looking statements are subject to various risks, uncertainties and assumptions, certain of which are not under our control, causing actual results and growth which may differ materially from these direct or indire
Slide 3: Content
Content 1 Results Highlights 2 Business Review 3 Financial Performance 4 Business Outlook 3
Slide 4: Results Highlights
@HILONG Results Highlights
Slide 5: Results Highlights
Results Highlights Hilong maintained stable operation despite the tough market environment in 1H2016 Oilfield services Oilfield equipment manufacturing & services Maintained healthy operation for traditional Drill pipe and related products business advantageous business of drilling services achieved
Slide 6: Financial Overview
Financial Overview RMB MM Revenue Gross Profit RMB MM Net MM RMB Profit to Equity Owners RMB mm RMB mm RMB mm 1,500 500 120 109 1,300 430 100 400 1,000 326 324 333 80 889 922 889 300 67 60 200 500 40 100 20 0 0 0 1H2015 1H2016 1H2015 1H2016 1H2015 1H2016 Revenue excluding Gross Profit excluding Tota
Slide 7: Business Review
@HILONG Business Review
Slide 8: Oilfield Services
Oilfield Services Maintained Stable Operation of Drilling Services Segment Revenue: -22% and Achieved Diversification of Business RMB mm GP margin % Achieved healthy operation for traditional advantageous 600 business amid the depressed market 42% 40% Successfully maintained steady operation of exis
Slide 9: Oilfield Equipment Manufacturing and Services
Oilfield Equipment Manufacturing and Services Segment Revenue: +19% Achieved notable growth in weak market RMB mm GP margin % Drill pipe and related products 600 50% Maintained a strong market position in China and a relatively stable market share 500 40% Successfully relocated part of the productio
Slide 10: Line Pipe Technology and Services
Line Pipe Technology and Services Implemented the Strategy of Diversification, Segment Revenue: + 33% High-end Orientation and Internationalization RMB MM GP margin % Realized substantial growth amid the tough market 180 30% 28% Coordinated development of domestic and international business and won
Slide 11: Offshore Engineering Services
Offshore Engineering Services Vigorously promoted the new segment and 1H2016 Revenue of RMB33 MM won several orders despite tough market conditions RMB mm Successfully finished two major EPCI service 500 contracts for CNOOC and built a solid track record Successfully won the contract from TIMAS, wil
Slide 12: Financial Performance
@HILONG Financial Performance
Slide 13: Revenue Breakdown
Revenue Breakdown Revenue Breakdown by Segment Offshore Offshore engineering services Oilfield services Oilfield equipment engineering 4% 34% manufacturing services & services 32% 44% Oilfield services 37% Oilfield equipment manufacturing Line pipe technology Line pipe technology & services & servic
Slide 14: Cost and Gross Profit Analysis
Cost and Gross Profit Analysis Total Cost in 1H2015: RMB871MM Gross Profit Margin Increased Others RMB mm GP margin % 9% 600 40% Raw materials Subcontracting cost 35.1% 32% 29% 500 33.1% 430 30% 400 Power & utilities Depreciation 4% 10% Transportation Labor cost 324 3% 13% 300 20% Total Cost in 1H20
Slide 15: Profitability
Profitability A Year-on-Year Decline of Net Profit Profitability under Pressure RMB mm 40% 140 35.1% 33.1% 120 109 30% 100 80 67 20% 60 40 10% 8.4% 7.3% 20 0 0% 1H2015 1H2016 Gross Net profit margin profit margin 1H2015 1H2016 15
Slide 16: Capital Structure and Return
Capital Structure and Return Capital Structure Return on Assets & Return on Equity (1) % 6.9% 2015 1H2016 3.2% 4.2% 2.0% RMB mm Operating cash flow 485 (100) 1H2015 1H2016 Return on assets Return on equity Cash & cash equivalents 821 474 Current assets 3,588 3,373 Turnover Days for Current Assets (2
Slide 17: Capital Expenditure
Capital Expenditure Capital Expenditure Breakdown Major Capital Expenditure Projects RMB mm 195 200 Offshore engineering services 180 Continuous upgrade for Hilong 106 60 160 140 131 120 20 100 Oilfield services 92 Procurement of rig components 80 67 60 40 0.2 30 Oilfield equipment manufacturing & 2
Slide 18: Business Outlook
@HILONG Business Outlook
Slide 19: To Implement New Development Strategies under New Market Conditions
To Implement New Development Strategies under New Market Conditions Overseas market – continue to cultivate individual key Invest new rigs to support the future growth of markets including Russia and its surrounding regions drilling services and strengthen its leading market position in these Alba
Slide 20: Q&A
@HILONG Q&A