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MTQ CORPORATION LIMITED
of the oil and gas supply chain will continue even if
transactions like Haliburton and Baker fail to complete
due to legislative challenges.
OILFIELD ENGINEERING – PREPARING FOR
RECOVERY
The Oilfield Engineering business comprises our
engineering facilities in Pandan Loop and Loyang
in Singapore, our facility in Bahrain and the Binder
Engineering Group with facilities in Perth, Australia and
Jakarta, Indonesia. TheGroup recordedadisappointing
year with lower drilling activity affecting the South
East Asia market leading to an overall operating loss
in Singapore. Our capabilities in Bahrain continue to
improve and we have successfully broadened our
work scope with key OEMs like NOV and GE. Cladding
and coating are some of the additional services we
offer our customers. We also continue to establish our
reputation with drilling contractors as the independent
vendor of choice in the Saudi market. We are looking
to develop more resources to broaden our range of
operations to cover other Middle East countries like
Kuwait and Iraq. In a low oil price world, the Middle
East prevails as a low cost producer and as a team we
continue to grow our presence in the wider market.
Our revenues in Bahrain remain skewed towards
maintenance opportunities which remain healthy.
However, customers are looking to achieve cost
savings given their significantly reduced revenues and
this continues to put us under pricing pressure.
For our pipe support activities, Binder Group continues
to focus on new capital projects in the downstream
sector. In the course of the year, we have been
successful in projects in Asia and the United States.
Notable awards have included the SLNG project in
Singapore and projects inMalaysia, India and Australia.
However, overall levels of revenue within the business
remain well below our expectations when we acquired
the business. We have continued to trim headcount
and reduce overheads in both Perth and Indonesia as
we respond to the market environment. In the light of
the losses in recent years, we have decided to write-
off the residual goodwill arising from the acquisition
and are taking an impairment charges of S$5.8 million.
We remain confident that LNG plants will continue to
be developed moving ahead, notably in markets like
the Middle East, India and the United States. Power
projects will also drive opportunities. We have also
started the process to position the Indonesian facility
to take on other Group capabilities.
In Singapore, workshop activity in Loyang and Pandan
Loop continued to remain low compared to pre-
2014. Revenue has dropped on the back of reduced
manufacturing inquiries and lower maintenance sales.
Lower oil prices have also cascaded into lower margins
for successful quotes. The level of maintenance being
incurred in the region has been reduced in line with
fewer assets in usage. With new builds tapering off,
the steady stream of contract manufacturing to fulfil
new orders has also diminished, this segment is likely
to remain quiet for the foreseeable future.
We have broadened our service offering to include
offsite maintenance and repair to help our customers
avoid downtime. In the year, we have sent teams to
the Caribbean, the Middle East, Africa and throughout
Asia to provide service support. We have also
broadened our engagement in other industries to tap
new maintenance markets, focusing on downstream
plant and general industrial needs. While headcount
reduction and other cost reductions have been
necessary, the business continues to devote resources
to positioning for future opportunities. We are
working with research organizations to introduce new
welding technologies as well as improved job tracking
software. Manpower continues to be an important
issue to manage, short term cost savings could lead
to long term loss of capabilities. We remain patient in
managing that balance in Singapore.
NEPTUNE MARINE – SUSTAINABLE
PERFORMANCE
Neptune recorded lower revenues for the year of
S$120.6 million. Translation differences accounted for a
part of the overall decline of 21% with the bulk of the
decline in Diving and Asset Integrity. Notwithstanding
GROUP CEO’S
STATEMENT
