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MTQ Corporat ion Limi ted Annual Repor t 2012/13 4
GROUP CEO’S STATEMENT
BUSINESS REVIEW
INTRODUCTION
MTQ operates in two sectors, the Oilfeld Engineering sector
and the Engine Systems sector. In recent years, most of our
focus has been placed on expanding our presence in the
Oilfeld Engineering sector. This trend will continue as we
foresee better prospects in this sector.
Our goal of becoming a diversifed oilfeld services company
accelerated this year with our acquisition of a 87% stake in
Neptune, a subsea service company operating in Australia
and the UK. Based in Perth, Neptune’s core activities are
in diving, inspection, repair and maintenance (“IRM”),
geomatics and ROV services, most of which are deployed in
subsea operating environments within Australia, the UK and
other parts of the world. Its core customers tend to be major
oilfeld services companies and oil companies involved in
upstream oil and gas developments. Neptune remains
listed on the Australian Securities Exchange.
Our strategy remains to develop a more comprehensive
range of services, both geographically and functionally,
so that our potential work scopes with our oil and gas
customers can increase. Our focus remains in specialist
engineering and subsea services, particularly in the repair
and maintenance phase of oilfeld assets.
Our Engine Systems business is primarily a distribution
and service business in Australia. It does operate on a set
of different business matrices as compared to the Oilfeld
Engineering business. We continue to focus on developing
our pan-Australian wide capabilities in this space, focusing
on growth sectors within Australia.
OILFIELD ENGINEERING
Oil and gas exploration activity continues to remain robust,
driven by underlying global demand for energy and the
depletion of previously discovered felds. While fossil
fuels inevitably raise environmental concerns, oil and gas
supplies continue to power global growth, especially given
its advantages over coal and nuclear alternatives. This
backdrop is refected in consistent charter rates for drilling
assets and high asset utilisations in all our key markets,
especially South East Asia/Australia and the Middle East.
This is in spite of the increase in orders and deliveries of
new assets entering the markets.
In supporting these activities, our Oilfeld Engineering
division recorded a 28% increase in revenue for the current
fnancial year to S$94.7 million. Proft before tax has likewise
increased in the Oilfeld Engineering business by 83%
to S$26.7 million, with contributions from the Singapore
operations and reduced losses from the Bahrain facility.
While the Bahrain facility accounted for a signifcant share
of the increase in revenues, our Singapore operations still
managed to generate incremental growth in spite of an
essentially static headcount. Our revenue increase for the
year also refects a full twelve months’ revenue recognition
from the Premier Sea & Land Limited and its subsidiaries
(“Premier Group”) acquisition in FY2012, as compared to
nine months previously.
Within Singapore, our activity patterns remain healthy.
Several of the major OEMs have expanded their presence in
the region, notably Halliburton and Cameron. Cameron has
completed its plans to develop its own after-market facility in
Singapore to better service its customers. We continue to
upgrade our equipment in our facilities at Pandan Loop and
Loyang to better service our customers. At the same time,
we seek to develop a broader base of oil and gas customers.
We continue to be encouraged by the business outlook for
our Bahrain facility, where we continue to secure work with
major equipment OEMs and drilling contractors operating in
the region. Our key focus is on strengthening the supervisory
aspect of our business and developing a more experienced
workforce. The nature of our industry requires signifcant
lead times in developing core competence. Overall sales
have grown signifcantly and we continue to see strong
prospects of good growth moving ahead.