RNS Number : 4058D
Plant Offshore Group Ltd
15 September 2008
Plant Offshore Group Limited
Unaudited Interim Results for the Six Months Ended 30 June 2008
Plant Offshore Group Limited ("POGL" or "the Company"), an AIM quoted company that provides Engineering, Procurement and Construction
Management ("EPCM") services to the oil and gas, renewable energy and related industries, today announces its unaudited interim results for
the six months ended 30 June 2008.
Financial Highlights
* Revenue down 7% to RM33.1m (�5m) (2007: RM35.6m (�5m))
* Profit from operations down 74% to RM1,931,000 (�303,000) (2007: RM7,414,000 (�1,087,000))
* Profit before tax down 75% to RM1,819,000 (�285,000) (2007: RM7,310,000 (�1,072,000))
* Basic earnings per share down 78% to RM0.009 (�0.001) (2007: RM0.042 (�0.006))
* Cash flow from operating activities up 253% to RM2,672,000 (�419,000) (2007: RM756,000 (�110,000))
Mr Cho Nam Sang, Chairman of POGL, commented:
"The group managed to report a profit for the six month period, despite a challenging environment, given the current weakness in the
global economy and, particularly, the rising cost of materials.
"Although these conditions still exist, we remain cautiously optimistic that we will be able to secure further contracts during this
difficult period, by leveraging our vast experience and technical knowledge in the oil and gas and related industries."
For further information:
Plant Offshore Group Limited
Mr. Hang Chin Juan, CEO Tel: +603 7805 5001
hang_cj@plantoffshore.com www.plantoffshore.com
Hoodless Brennan plc
Luke Cairns, Director, Corporate Finance Tel: +44(0)20 7510 8600
L.Cairns@HBcorporate.co.uk www.hbcorporate.co.uk
Threadneedle Communications
Josh Royston / Graham Herring Tel: +44(0)20 7653 9844
About POGL:
POGL is the holding company of an established and profitable group of companies engaged in the business of providing integrated,
multi-discipline EPCM services to the oil and gas (onshore and offshore), petrochemical, biodiesel, energy and other related industries. The
group operates primarily in the ASEAN region but this focus is expanding, with the group having won contracts in the Middle East. The
services of POGL are focused on EPCM services. This is broken down and incorporates the following features:
* Engineering "E" - specialist engineering design services;
* Procurement "P" - the procurement of the relevant materials and equipment to meet design specifications such as skid and process
equipment; and
* Construction Management "CM" - the management on a client's behalf of the construction or fabrication of a project. The services can
be provided, together with more general Project Management, either in totality or partially dependent on the client's requirements. In
addition POGL supplies industry specialists to the oil and gas and related industries.
POGL listed on AIM, a market of the London Stock Exchange, in July 2007. For more information on the company, please visit
www.plantoffshore.com.
Chairman's Statement
I am pleased to present the interim results of POGL for the period ended 30 June 2008. This period has been a challenging one, not just
for us, but also for other companies worldwide due to global political and economical instability, rising oil and commodity prices, and
various other negative factors. Although we have still been profitable for this period, our turnover and profit margins have been affected
by these challenges and are behind market expectations.
With oil prices remaining high, we expect long-term investment in oil and gas infrastructure to remain robust. Also, given the high
demand for oil and gas products in most industries, there is a positive effect on oil and gas and related businesses, particularly in the
services segment. We believe that, given these factors, demand for POGL's EPCM services should, over time, increase. We continue to tender
for new contracts to replenish our order book and remain cautiously optimistic that tenders will turn into contracts during the second half
of this financial year. However, we acknowledge that given the general weak market conditions, the award of new contracts may take longer
than usual.
Financial Performance
Group revenue, profit from operations, profit before tax and basic earnings per share for the six months ended 30 June 2008 declined
compared with that of 30 June 2007. This was largely due to our clients' request to delay some existing projects, and thinning profit
margins attributed to the rising cost of materials. However, group cash flow from operating activities remained healthy during this period.
Group revenue was down 7% to RM33.1m (�4.65m), profit from operations down 74% to RM1,931,000 (�303,000), profit before tax down 75% to
RM1,819,000 and basic earnings per share was also down 78% to RM0.009 (�0.001). However, group cash flow from operating activities increased
by 253% to RM2,672,000 (�419,000).
Current Trading and Outlook
During the period under review, we have completed three engineering contracts in Malaysia. We have seven onshore and offshore oil and
gas contracts that are still ongoing and are expected to be completed by the end of 2009. However, some of the group's existing projects
have been delayed due to changes in the clients' design specifications and requirements.
The group currently has ongoing contracts and work in progress in excess of RM81 million, over the next 18 months. In addition, the
group has tendered for onshore and offshore oil and gas contracts in Malaysia and overseas amounting to RM250 million. However, given the
general weak market conditions, the award of new contracts may take longer than usual.
Finally, on behalf of the Board of Directors, I would like to thank all our management and staff for their continued dedication, hard
work and commitment during the period under review.
Mr. Cho Nam Sang
Chairman
12 September 2008
Consolidated Income Statement for the six months ended 30th June 2008
Six months ended Six months ended Year ended
30th June 2008 30th June 2007 31st December 2007
Unaudited Unaudited and restated Audited
RM000 RM000 RM000
Revenue 33,102 35,606 96,270
Cost of sales (28,082) (26,487)
(75,816)
Gross profit 5,020 9,119 20,454
Other Operating income 13 43 291
Administrative expenses (2,770) (1,412) (3,606)
Other Operating expenses (332) (336) (569)
Profit from operations 1,931 7,414 16,570
Finance costs (112) (104) (292)
Profit before taxation 1,819 7,310 16,278
Taxation (322) (1,070) (2,121)
Profit after taxation 1,497 6,240 14,157
Attributable to:
Equity holders of the Company 1,496 6,239 14,174
Minority interests 1 1 (17)
Profit for the period 1,497 6,240 14,157
Earnings per share - from
continuing
operations
Basic RM0.009 RM0.042 RM0.088
Fully diluted RM0.009 RM0.042 RM0.088
Consolidated Statement of Changes in Equity
Attributable to the equity holders of the Company
Non-Distributable Foreign currency
Reverse Distributable
Share Capital Share Premium Translation reserve Acquisition Reserve Retained Earnings
Minority Interest Total Equity
Total
RM000 RM000 RM000 RM000 RM000 RM000
RM000 RM000
At 1 January 2008
113 19,347 (32) (8,166) 22,224 33,486 266
33,752
Profit for the financial - - 7 - 1,497
period 1,504 1
1,505
At 30 June 2008
113 19,347 (25) (8,166) 23,721 34,990 267
35,257
Attributable to the equity holders of the Company
Non-Distributable Foreign currency
Reverse Distributable
Share Capital Share Premium Translation reserve Acquisition Reserve Retained Earnings
Minority Interest Total Equity
Total
RM000 RM000 RM000 RM000 RM000 RM000
RM000 RM000
At 1 January 2007
2,000 - - - 8,051 10,051 �
10,051
Reverse acquisition (8,166) -
(1,898) 10,064 -
Profit for the financial
period - - - - 6,239 6,239 1
6,240
At 30 June 2007 (Restated)
102 10,064 - (8,166) 14,290 16,290 1
16,291
Consolidated Balance Sheets
Six months ended Six months ended Year ended
30th June 2008 30th June 2007 31st December 2007
Unaudited Unaudited and restated Audited
RM000 RM000 RM000
Assets
Non-current assets
Property, plant and equipment
4,768 3,219 4,598
Goodwill 933 766 933
Development cost 5,511 3,583 4,592
Total non-current assets
11,212 7,568 10,123
Current assets
Trade receivables
35,688 30,198 54,330
Other receivables 3,384 3,245 3,569
Stock 1,200 - -
Property development cost
216 - 127
Amount due from contract
customers 10,747 1,397 10,002
Listing expenses - 997 -
Cash and bank balances
1,157 393 1,297
Total current assets 52,392 36,230 69,325
Total assets 63,604 43,798 79,448
Current liabilities
Trade payables (15,814) (21,021) (30,990)
Other payables (784) (639) (766)
Amount due to contract
customers (4,285) (14) (5,853)
Amount due to director
(5) (553) (5)
Borrowings - secured (4,237) (2,601) (4,366)
Tax payable (1,287) (1,815) (1,561)
Total current liabilities
(26,412) (26,643) (43,541)
Net current assets 25,980 9,587 25,784
Non-current liabilities
Borrowings - secured (1,287) (764) (1,506)
Amount due to director (548) - (548)
Deferred tax liability (100) (100) (101)
Total non-current liabilities
(1,935) (864) (2,155)
Total liabilities (28,347) (27,507) (45,696)
Net assets 35,257 16,291 33,752
Equity
Called up share capital 113 102 113
Share premium 19,347 10,064 19,347
Foreign currency translation
reserve (25) - (32)
Reverse acquisition reserve
(8,166) (8,166) (8,166)
Retained earnings 23,721 14,290 22,224
Total equity attributable to
equity holders of the Company
34,990 16,290 33,486
Minority interests 267 1 266
Total equity 35,257 16,291 33,752
Consolidated statement of cash flows for the six months ended 30th June 2008
Six months ended Six months ended Year ended
30th June 2008 30th June 2007 31st December 2007
Unaudited Unaudited and restated Audited
RM000 RM000 RM000
Cash flow from operating
activities
Profit before taxation 1,819 7,310 16,278
Adjustments for:
Profit on disposal of
property, plant and equipment
- (17) (17)
Depreciation 384 206 405
MI share of current year
profit - - 16
Interest expense 112 104 292
Property, plant and equipment
written off - - 5
Amortization of development
cost 290 71 141
Unrealised loss on foreign
exchange loss (20) - (12)
Operating profit before
changes in working capital :
2,585 7,674 17,108
(Increase)/Decrease in
receivables 18,843 (25,317) (48,775)
Increase/(Decrease) in
payables (15,158) 19,093 29,190
(Increase)/Decrease in
property development cost (86) - (63)
(Increase)/Decrease in amount
due from contract customers
(745) (388) (8,993)
(Increase)/Decrease in stock (1,200) - -
Increase/(Decrease) in amount
due to contract customers (5)
5,533
(1,567) (306)
Cash flows generated from
operating activities 2,672 756 (6,005)
Interest paid (112) (104) (292)
Income tax paid (597) (21) (1,324)
Net cash generated from
operating activities 1,963 631 (7,621)
Cash flows from investing
activities
Purchase of property, plant (58)
and equipment (547) (599)
Acquisition of subsidiary - -
company 40
Proceeds from disposal of - 215
property, plant and equipment 216
Addition to development cost (1,209) (962)
(1,979)
Net cash used in investing (1,756) (805)
activities
(2,322)
Cash flows from financing
activities
(Decrease)/Increase in amount - (5)
due to director
-
(Repayment)/Drawdown of short (94) (68)
term borrowings
2,007
Repayment of term loan (66) (60) (360)
Proceeds from issuance of - -
ordinary shares 9,258
Repayment of hire purchase (187) (254)
payables (125)
Net cash (used)/generated from (347) (387)
financing activities 10,780
Net decrease in cash and cash (140) (561)
equivalents
837
Effect of foreign exchange
rate changes 9
Cash and cash equivalents at 1,297 271
beginning
of period/year
271
Cash and cash equivalents at 1,157 (290)
end
of period/year
1,117
Notes to the Unaudited Interim Report for the six months ended 30th June 2008
1. Significant Accounting Policies
(a) Basis of preparation and accounting policies - The financial information contained in the Interim Results has been prepared in
accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union. It has been prepared in accordance
with IAS 34 - Interim Financial Reporting and does not include all of the information required for full annual financial statements. Full
details of the accounting policies adopted which are consistent with those disclosed in the group financial statements for the year ending
31st December 2007.
(b) Basis of Consolidation
The consolidated income statement and balance sheet include financial statements of the company and its subsidiaries made up to 30 June
2008.
(c) Nature of financial information
The financial information contained in this Interim Results for the six months ended 30th June 2008 and 30th June 2007 are unaudited.
The comparative figures for the year ended 31st December 2007 do not constitute statutory financial statements of the group. Full audited
accounts of the Group in respect of that financial period prepared in accordance with IFRS, which we received an unqualified audit opinion
have been delivered to Registrar of Companies.
(c) Restatement of comparative
The comparative financial information for the period ended 30 June 2007 has been restated as a result of application of the reverse
acquisition principle in
accordance to IFRS3.
(d) Revenue recognised for contract is in accordance to IAS 11 - Construction Contracts. Where the outcome of a contract work can be
reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion
method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the
estimated total contract costs. Where the outcome of a contract work cannot be reliably estimated, contract revenue is recognised to the
extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which
they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an
expense immediately.
The consolidated financial information is presented in RM (Ringgit Malaysia) because the Group is expected to transact more of its
business in RM (functional currency) than any other currency.
The highlighted financial information has been translated using the following exchange rate: RM6.3735 : �1 (average month-end exchange
rate from January to June 2008).
2. Taxation
The charge for income tax expense included in the Interim Results is based on the unaudited results for the six months ended 30th June
2008 and is calculated at the expected rate applicable to the group for the full year ending 31st December 2008.
3. Earnings per share
Earnings per share is calculated by dividing the profit attributable to equity shareholders in the period ended 30 June 2008 by the
weighted average number of shares in issue in the period.
The profit attributable to equity shareholders in the period ended 30 June 2008 was RM1,496,000 (30 June 2007 : RM6,239,000; year ended
31 December 2007 : RM14,147,000). The weighted average number of shares in POGL in issue in the period ended 30 June 2008 was 166,666,667,
the weighted average number of shares in the period ended 30 June 2007 was 150,000,000 and the year ended 31 December 2007 was 160,057,471.
4. Contingent and other liabilities
Corporate guarantees amounting to RM7,375,000 given to licensed banks for credit facilities granted to a subsidiary company. Corporate
guarantees amounting to RM1,051,000 given to licensed banks in respect of property, plant and equipment acquired under hire purchase
arrangement by a subsidiary company.
5. Dividends
The Directors do not recommend the payment of any dividend in respect of the current interim ended 30 June 2008.
6. Segmental analysis
Six months ended Six months ended Year ended
30th June 2008 30th June 2007 31st December 2007
Unaudited Unaudited Audited
RM000 RM000 RM000
Revenue
EPCM 28,278 30,869 88,068
Supply of Specialists (SOS) 4,824 4,237 7,445
Engineering Design Software - 500 750
Consultancy service income - - 7
33,102 35,606 96,270
TOTAL
7. Material events subsequent to the end of the quarter
There are no material events subsequent to the end of the quarter.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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