2
ANNUAL REPORT 2015/2016
DEAR SHAREHOLDERS,
For the financial year ended 31 March 2016, MTQ
Group (“MTQ” or “the Group”) recorded revenue
of S$221.8 million, a decline of 25% from the
previous year. A loss attributable to shareholders
was S$18.5 million, which included goodwill
impairment charges of S$5.8 million and asset
impairment charges of S$7.1 million. Excluding the
impairments, the Group recorded post tax losses
of S$6.8 million. The year has been a difficult one
for the oil and gas industry as a whole.
Since the oil price started to fall inOctober 2014, the
industry has struggled with the effects of excess
production and capacity. Prices are expected to
remain mired at the current US$33-US$55 range.
Many companies in the sector are struggling to
remain profitable at such levels.
Global rig utilization continues to be remain low.
At the same time, we continue to see delivery of
new capital acquisitions being deferred. A sizeable
number of rigs and floaters are stacked awaiting
work opportunities. The over investment of the last
decade in capital assets was driven by sentiment
and low interest rates. This overhang will continue
to cast a pessimistic cloud over the asset sector
until we see older assets being extensively retired
or scrapped and drilling activities increase. Even
within themore profitable LNG downstreamareas,
several major projects in the US and Asia have
also been delayed in line with global markets.
Production activities have continued but service
companies have had to settle for lower prices in
this environment.Within our Group, we have seen
CHAIRMAN’S
STATEMENT
“At this point, the prospects of a
quick recovery look difficult. In the
meantime, all our businesses will
focus on opportunities.... working
closely with key customers....on
maintenance and other service-
related opportunities.”
Kuah Kok Kim
Chairman
