CSE Global Limited · SGX:544
CSE Global — Q2 2017 Earnings Presentation
30 slides from CSE Global's earnings presentation, Aug 11, 2017
Slide 1: 2Q/1H 2017 Results Briefing
2Q/1H 2017 Results Briefing CSE Global Limited Fullerton Hotel 11 August 2017
Slide 2: Agenda
Agenda 1. 2Q/1H2017 Financial Overview 2. Business Overview and Outlook 3. Q&A 2
Slide 3: 2Q & FY2017 Financial Review
2Q & FY2017 Financial Review 3
Slide 4: Summary Financials 2Q And 1H 2017
Summary Financials 2Q And 1H 2017 S$’m 2Q 2017 2Q 2016 Change 1H 2017 1H 2016 Change Revenue 85.5 74.3 15.1% 160.1 158.5 1.0% Gross Profit 22.0 25.5 -14.0% 43.7 49.6 -11.9% Operating expenses 18.1 18.6 -2.3% 36.1 36.3 -0.6% Operating Profit 3.8 7.0 -45.1% 7.6 13.3 -42.9% EBIT 4.3 7.3 -41.6% 8.4 13.7
Slide 5: 2Q 2017 Financial Overview Continuing Operations
2Q 2017 Financial Overview Continuing Operations Revenue increased by 15.1% to S$85.5m yoy, from Mining & Mineral and Infrastructure industry segments Gross margins decreased to 25.7% in 2Q17 vs 34.4% in 2Q16, leading to 14.0% decline in GP to S$22.0m Operating profit in 2Q17 saw a 45.1% decli
Slide 6: 1H 2017 Financial Overview Continuing Operations
1H 2017 Financial Overview Continuing Operations Revenue increased by 1.0% to S$160.1m yoy, from Mining & Mineral and Infrastructure industry segments Gross margins decreased to 27.3% in 1H17 vs 31.3% in 1H16, leading to 11.9% decline in GP to S$43.7m Operating profit in 1H17 saw a 42.9% decli
Slide 7: 1H 2017 Financial Overview: Financial Position & Cashflow
1H 2017 Financial Overview Continuing Operations Financial Position & Cashflow Operating cash outflow of S$10.5m in 2Q17 and S$9.2m in 1H17 Net Cash of S$35.2m at 2Q17 vs S$55.8m at 1Q17, mainly due to funding of working capital and dividend payments of S$7.7m. Equity attributable to owners of
Slide 8: 2Q & 1H 2017 FX Movement
2Q & 1H 2017 FX Movement Variance Variance 2Q 2017 2Q 2016 1H 2017 1H 2016 (%) (%) USD/SGD: 1.3930 1.3617 2.30% 1.4097 1.3903 1.40% GBP/SGD: 1.7723 1.9794 -10.46% 1.7713 2.0161 -12.14% AUD/SGD: 1.0485 1.0167 3.13% 1.0574 1.0093 4.76% 8
Slide 9: 2Q & 1H 2017 Constant Currency
2Q & 1H 2017 Constant Currency 2Q 2017 S$M 2Q 2017 2Q 2016 Variance (%) Constant Variance (%) Currency Revenue: 85.5 74.3 15.1% 83.8 12.7% PATMI: 3.0 5.5 -45.4% 3.0 -46.3% 1H 2017 S$M 1H 2017 1H 2016 Variance (%) Constant Variance (%) Currency Revenue: 160.1 158.5 1.0% 157.1 -0.9% PATMI: 6.0 11.0 -4
Slide 10: Revenue by Geographical Region – 1H 2017
Revenue by Geographical Region – 1H 2017 S$'m 1H 2017 1H 2016 Var % Americas 78.1 86.6 -9.8% EMEA 17.2 20.9 -17.8% Asia Pacific 64.8 51.0 27.0% Total 160.1 158.5 1.0% 1H 2017 1H 2016 40% Americas 32% Americas 49% EMEA EMEA Asia Pacific 55% Asia Pacific 13% 11% 10
Slide 11: EBIT by Geographical Region – 1H 2017
EBIT by Geographical Region – 1H 2017 S$'m 1H 2017 1H 2016 Var % Americas 0.1 5.7 -98.4% EMEA (0.0) 2.6 -101.2% Asia Pacific 8.3 5.4 54.1% Total 8.4 13.7 -38.8% 1H 2017 1H 2016 1% 0% 39% 42% Americas Americas EMEA EMEA Asia Pacific Asia Pacific 99% 19% 11
Slide 12: Revenue by Geographical Region – Qtrly Trends
Revenue by Geographical Region – Qtrly Trends S$'m Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Americas 40.9 37.2 34.2 38.9 39.2 47.4 EMEA 8.3 8.8 9.4 11.1 8.9 12.0 Asia Pacific 36.3 28.5 34.7 30.9 26.2 24.9 Total 85.5 74.5 78.3 81.0 74.3 84.2 12
Slide 13: Revenue by Industry – 1H 2017
Revenue by Industry – 1H 2017 S$'m 1H 2017 1H 2016 Var % Mining & Mineral 11.1 5.5 101.5% Infrastructure 42.3 28.4 48.8% Oil & Gas 106.6 124.6 -14.4% Total 160.1 158.5 1.0% 1H 2017 1H 2016 3% 7% 18% 26% Mining & Mineral Mining & Mineral Infrastructure Infrastructure Oil & Gas Oil & Gas 67% 79% Infra
Slide 14: EBIT by Industry – 1H 2017
EBIT by Industry – 1H 2017 S$'m 1H 2017 1H 2016 Var % Mining & Mineral 0.3 1.2 -76.5% Infrastructure 6.2 3.9 56.8% Oil & Gas 1.9 8.5 -77.4% Total 8.4 13.7 -38.8% 1H 2017 1H 2016 3% 9% 23% Mining & Mineral Mining & Mineral 29% Infrastructure Infrastructure Oil & Gas Oil & Gas 62% 74% Infrastructure:
Slide 15: Revenue by Industry – Qtrly Trends
Revenue by Industry – Qtrly Trends S$'m Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Mining & Mineral 9.1 2.0 9.9 6.7 2.8 2.7 Infrastructure 23.3 19.1 14.1 16.4 15.5 12.9 Oil & Gas 53.2 53.5 54.4 57.9 56.0 68.6 Total 85.5 74.5 78.3 81.0 74.3 84.2 15
Slide 16: 2Q 2017 Group Balance Sheet
2Q 2017 Group Balance Sheet S$M 30-Jun-17 31-Mar-17 31-Dec-16 30-Sep-16 30-Jun-16 31-Mar-16 Cash at Hand & Bank 53.9 75.8 90.8 71.2 64.0 76.3 Quoted Investments 9.4 9.4 7.4 20.4 20.3 0.0 Work in Progress (Net) 38.4 42.3 30.9 27.0 24.5 37.7 Inventories 19.3 16.8 14.7 12.4 12.8 12.7 Trade Receivable 9
Slide 17: 2Q/1H 2017 Group Cash Flow Statement
2Q /1H 2017 Group Cash Flow Statement S$'m Q2 2017 Q2 2016 1H 2017 1H 2016 As at beginning of the period 75.8 76.3 90.8 109.7 Net Operations (10.5) 22.7 (9.2) 42.3 Capital Expenditure (Net) (1.9) (1.7) (5.3) (4.7) Quoted investments - (20.3) (2.1) (20.3) Payment/ subsequent payment for - - (8.2) (10
Slide 18: Human Resource
Human Resource 2Q 2017 4Q 2016 2Q 2016 The America 582 597 526 EMEA Asia Pacific 434 460 459 1,073 1,036 1,105 18
Slide 19: 2Q/FY 2017 Orders
2Q/FY 2017 Orders New orders Outstanding orders $208.6m $286.6m $207.9m $163.1m $179.6m 57.7 22.8 4Q 70.8 53.2 3Q EMEA 89.4 43.2 90.7 2Q The Americas 27.8 1Q 30.9 83.2 Asia Pacific 117.9 95.7 105.5 89.0 74.9 FY 2017 FY 2016 2Q 2017 4Q 2016 1Q 2016
Slide 20: Order Intake by Industry
Order Intake by Industry S$'m Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Oil & Gas 57.8 86.4 43.3 49.6 39.5 62.2 Mining 6.0 2.4 1.9 4.2 23.8 2.0 Infrastructure 27.0 29.0 12.5 17.0 19.9 10.7 Total 90.7 117.9 57.7 70.8 83.2 74.9 20
Slide 21: Backlog by Industry
Backlog by Industry S$'m Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Oil & Gas 106.9 103.1 75.2 82.6 85.9 104.5 Mining 8.7 11.9 10.7 20.6 25.8 4.7 Infrastructure 92.4 89.2 77.1 75.8 74.9 70.5 Total 207.9 204.2 163.1 179.0 186.6 179.6 21
Slide 22: Business Overview & Outlook
Business Overview & Outlook 22
Slide 23: Business Overview
Business Overview • Q2 2017 was another challenging quarter Negatives • Settlement with OFAC – S$16.8m • Lower margins for projects now reflected Positives • Good new order received of S$90m • Maintain order book > S$200m 23
Slide 24: Business Outlook
Business Outlook The rest of FY2017 • Operating conditions remain challenging - increased enquires but no increase in awards • Operating expenditure of customers remains resilient, but anticipate lower level of brownfield activities and prices 24
Slide 25: Business Overview – What we intend to do
Business Overview - What we intend to do Internal • Focus on cash generation • Continue to be vigilant in managing operating cost • Integrate the 6 new acquisitions • Strengthen its technical knowhow/solutions 25
Slide 26: Business Outlook
Business Outlook External • Support and service its existing customers • Build geographical presence • Grow our Mining & Infrastructure business • Diversify into midstream and downstream O&G business and new shale formations in USA 26
Slide 27: Business Outlook Summary
Business Outlook Summary • Conditions in the industry sectors which the Group operates remain challenging. Despite the improved oil and gas and commodity prices, our customers remain highly focused on cost control and cash flow generation. Though the Group has secured higher orders in 1H17 compared
Slide 28: Business Outlook Summary
Business Outlook Summary For the next quarter and FY2017, CSE expects to report weaker operating performance as compared to the same corresponding period in 2016, but it expects to remain in a net cash position at the end of the year. CSE will focus on integrating and consolidating the new acqui
Slide 29: Interim Dividend
Interim Dividend • Declares interim dividend of S$0.0125 per share Book closure date: 25th August 2017 Payment date: 13th September 2017 - Proposed interim dividend: S$6.5m CSE intends to maintain the full year dividend of S$0.0275 per share for 2017. 29
Slide 30: Questions & Answers Thank You
Questions Questions & Answers Thank You 30