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BAKERTECHNOLOGYlimited
ANNUAL REPORT 2015
CHAIRMAN’SMESSAGE
DEARSHAREHOLDERS,
On behalf of the Board of Directors, I am
pleased to present to you our Annual Report
for thefinancial year ended31December 2015
(“FY2015”).
FY2015hasbeenayearof uncertainty.Wehave
seen continued volatility in oil and gas prices
during this period, and the industry has been
rife with delays in rig and vessel deliveries,
cancellation of contracts and significant
pressure on contract rates. These continuing
economic uncertainties have brought about a
periodof prolonged challenges.
Theweaker oil price environment has seen oil
majors recalibrating their investment budgets
andplans as they adjust to thepresentmarket
dynamics. These changes in the oil and gas
industry would inevitably have a knock-on
effect in the oilfield services supply chain
including price pressures and potential delays
in theawardof projectsand the lackof interest
inacquiringnew rigsandequipment.
THEYEAR INREVIEW
The Group’s FY2015 revenue was down 37% year on year to $54.1 million, as
the impact of low oil prices rippled across the oil industry. Net profit eased to
$9.2 million in 2015 from $13.5 million in 2014, pressured by lower revenue
recorded during the year. This includes a foreign exchange gain of $5.3 million
(2014: $3.6 million) from the strengthening of the U.S. dollar against the
Singaporedollar.
TheGroup continues tohave a strongbalance sheet with shareholders’ funds as
at31December2015at$228.9million,up from$216.9millionat thepreviousyear
end. Thiswasdue toan increase insharecapital contributedby theconversionof
warrants (contributing$13.2million),whichwasoffsetby thepaymentofdividend
of $10.1million to shareholders.
The Group reported net operating cash outflows of $22.5million for FY2015, to
fundworkingcapital requirements.Cashandshort-termdepositswereat$140.1
million, withnoborrowingsasat 31December 2015.
TheBoard is recommendingafirst andfinal taxexempt (one-tier) dividendof 0.5
cent per share for thefinancial year ended31December 2015.
PROPOSEDSHARECONSOLIDATION
With effect from 2 March 2015, the Singapore Securities Trading Limited,
or SGX-ST, implemented a minimum trading price requirement of $0.20 per
share forsharesof issuers listedon theMainboardof theSGX-STasacontinuing
listing requirement.
In accordance to the requirement, the Board announced the Proposed Share
Consolidationof everyfive (5) existing issuedordinary shares in thecapital of the
Company intoone (1) ordinary share.
LOOKINGAHEAD
Everycompany in theoil andgasworld isadjusting toamajorshift ineconomics.
Fewpeoplewouldhavepredicted suchadramaticand sudden fall inoil prices.
The Company’s immediate priorities are to de-risk execution, secure sales
and seize opportunities while leveraging on the extensive experience of our
management teamandemployees.
Withaveteranmanagement teamwhohasbeen throughmajoroilandgascycles,
we believe we are able to steer the Group safely through this period of market
uncertainty.
INAPPRECIATION
On behalf of the Board, I would like to express sincere thanks to all our
shareholders, valued customers, suppliers and business associates for their
long-standing support and confidence in theCompany.
I would also like to acknowledge the hard work and loyalty of themanagement
and staffwhopressedon in the faceof a toughoperatingenvironment.
Finally,mydeepappreciationgoestomyfellowBoardmembersfortheir invaluable
guidanceandprofessionalism inexecuting their corporate responsibilities.
LimHoSeng
Chairman
