fy2006 results review - hyfluxinvestors.hyflux.com/pdf/slides_-_results_fy_2006_finalv1.pdf · epc:...
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FY2006 Results Review28th February 2007
2
AgendaAgenda
1 Financial Review
2 Outlook
Financial ReviewFinancial Review
Presented by Grace GohGroup CFO
4
Financial HighlightsFinancial Highlights
(57%)S$50.4mS$21.7mPBT
(63%)S$49.4mS$17.0mPATMI
0.050.43Net Debt-to-Equity Ratio
(including PF loan)
(65%)9.24cents3.28centsEPS
(77%)S$24.9mS$5.7mOne time and fair value gains
(19%)S$25.4mS$20.5mOperating profit *
(1%)S$131.5mS$129.8mSales
+ / (-) %FY 2005FY 2006
* Excludes one time and fair value gains
5
74.1
32.732.732.732.7
90.190.190.190.1
7.07.07.07.00.8
56.6
0000
10101010
20202020
30303030
40404040
50505050
60606060
70707070
80808080
90909090
100100100100
Revenue by SectorRevenue by SectorS$’m
Municipal Sales 56% yoy
− Lower revenue from Middle East and Singapore
− SinoSpring - EPC revenue are fully eliminated upon consolidation
− 25% of 2006 Group revenue
FY 2005 FY 2006 FY 2005 FY 2006 FY 2005 FY 2006
MunicipalMunicipal IndustrialIndustrial OthersOthers
Consumer Sales 783% yoy
─Turnaround for FY06
─Sales expected to improve
─5% of 2006 Group’s revenue
Industrial Sales 59% yoy
─Strong order book and demand in the pharmaceutical and bio-technology sectors
─70% of 2006 Group revenue
6
20.8 21.5 23.534.5
52.3 56.6
90.1
2000 2001 2002 2003 2004 2005 2006
Strong Industrial GrowthStrong Industrial GrowthRevenue in S$’m
Growth backed by :
� New membranes application
� Robust demand from pharmaceutical, biotechnological & petrochemical sectors
7
Revenue by SectorRevenue by Sector
FY 2006FY 2006FY 2006FY 2006
Municipal
25%
Industrial
70%
Others
5%
FY 2005FY 2005FY 2005FY 2005
Industrial
43%
Others
1%
Municipal
56%
8
China China –– Key Revenue DriverKey Revenue Driver
FY 2006FY 2006FY 2006FY 2006
China
71%
SG
21%
OTH
8%
FY 2005FY 2005FY 2005FY 2005
SG
26%
OTH
18%
China
56%
9
Building up Recurring Income StreamBuilding up Recurring Income Stream
0%0%0%0%
10%10%10%10%
20%20%20%20%
30%30%30%30%
40%40%40%40%
50%50%50%50%
2005200520052005 2006200620062006 MediumMediumMediumMediumTermTermTermTerm
Long TermLong TermLong TermLong Term
% of Recurring Income to Total % of Recurring Income to Total % of Recurring Income to Total % of Recurring Income to Total RevenueRevenueRevenueRevenue
17%17%17%17%
> 30%> 30%> 30%> 30%
2%2%2%2%
3333---- 5 yrs5 yrs5 yrs5 yrs > 5 yrs> 5 yrs> 5 yrs> 5 yrs
20% 20% 20% 20% ---- 30%30%30%30%
10
Higher Personnel & Development CostsHigher Personnel & Development Costs
� To develop and expand into new markets and used oil recovery business
19.022.822.822.822.8
12.412.412.412.4
3.53.53.53.5
(0.2)
14.5
-5-5-5-50000555510101010
151515152020202025252525
FY 2005 FY 2006 FY 2005 FY 2006
Personnel Expense + Cost of Share based
Personnel Expense + Cost of Share based
Other Operating Expense
Other Operating Expense
Net Financial (Income)/Expense
Net Financial (Income)/Expense
FY 2005 FY 2006
► Necessary to generate new revenue streams
11
Cash Flow AnalysisCash Flow Analysis
(42%)64.637.2Net cash (used in) / generated
from financing activities
(6%)(55.8)(59.3)Net cash used in investing
activities
NM26.1(14.0)Net cash (used in) / generated
from operations
NM0.1(1.2)Payment of tax
NM26.0(12.8)Cash (used in) / generated from
operations
(3%)31.830.9
Profit before working capital changes adjusted for non cash item
ChangeFY 2005FY 2006In S$’m
12
Healthy Cash FlowHealthy Cash Flow
� Net cash used in operations of S$14.0m– Higher working capital requirements
– Higher tax payments of S$1.2m
– Higher trade creditors of S$25.4m
– Offset by related parties payments of S$11.8m
Net cash used in operations
Net cash used in investing activities
Net cash generated from financing activities
� Net cash used in investing activities of S$59.3m– Acquisitions of subsidiaries of S$10.9m– Property, plant and equipment of S$32.2m – Technologies, patents, license of S$11.7m
� Net cash generated from financing activities of S$37.2m– Interest payments of S$9.1m– Dividends distribution to shareholders of S$7.0m– Offset by drawdown of term loans of S$38.7m
13
0.43 0.05Net debt to equity ratio (including PF* Loan)
Healthy Debt to Equity RatioHealthy Debt to Equity RatioDec 06Dec 06 Dec 05Dec 05
78.1
ChangeChange
PF Loan
Long Term
Short Term
Total Borrowings
75.8 +2.3
Net Borrowings 93.4 10.7 +82.7
38.9 30.9 +8.0
32.2 0.4 +31.8
149.2 107.1 +42.1
Less : Cash & cash equivalents
(55.8) (96.4) -40.6
Net Debt Net CashNet debt to equity ratio (excluding PF* Loan)
Amts in S$’million
* PF – Non-recourse project financing
14
Low Debt Equity
Ratio of 0.43
Raise Equity (when
needed) to Increase
Capacity to Fund Large
Projects
Business trust or
infrastructure fund
Optimize Capital
Structure
�US$138m syndicated loan
� IFC – Tianjin US$25m
�Project financing
� Achieved asset light strategy
� Partial divestment of SingSpring Asset into Trust . Cash – $20.4m capital gain –S$8m
Funding GrowthFunding Growth
15
Order BookOrder Book
318318318318435435435435
2005200520052005 2006200620062006
� Order Book - S$435m
• Industrial / Consumer projects – S$110m
• Municipal projects - $325m
� Recurring income – S$4-6m
� Potential from SinoSpring group : S$160m to S$170m
Growth in order book mainly contributed by :
� Our pioneer projects in Algeria
� Industrial sector in China with strong demand in the pharmaceutical and bio-technology sectors
S$S$S$S$’’’’mmmmSin
oSprin
g SinoSpr
ing
37%
Presented by Sam OngGroup EVP & Chief Investment Officer
Executing & Restructuring Projects for GrowthExecuting & Restructuring Projects for Growth
17
2006 Summary
� Municipal Performance : Short Term Impact
� Very Strong Industrial Sales
� Very Strong Order Book
� Algeria : The Largest Project
� Investing For Future : People & Geo
� New pillar of Growth : Used Oil Recycling
� New JVs : Marmon / Hyflux Consumers
� Emphasis on O&M recurring revenues
� New Funding Platform : Biz Trust
30% CAGR (2003-2008)
Wat
er U
tiliti
es
Indu
stria
l
Oil
/ Rec
yclin
g
Financial CapabilityOperational Capability
TechnologyHum
an
Cap
ital
Singapore / SE AsiaChina
India, MENA
Con
sum
er
It’s So Clear
China
19
China Utilities (Sinospring)
450,000~400Total
50,000902008Huludao Desalination
100,0001542009Tianjin Desal
20,000112008Jiangsu, Dafeng South WTP
20,000122007Jinagsu, Yangkou WTP
40,000142008Jiangsu, Wujin WWTP
80,000292007Hebei, LangfangWWTP/WRP
20,000132007Jiangsu, Yangzhou WWTP
30,000102007Liaoning, Liaoyang WWTP/WRP
20,00092006Zhejiang, TiantaiWWTP
20,000102006Jiangsu, TaizhouWWTP
30,000172006Jiangsu, ChangshuWWTP
20,000112006Jiangsu, Wuxi WWTP
Capacity (m3/day)
Cost of Project (S$m)
Year of Completion
Project
20
Huludao Llatic Acid(substantiallycompleted)
Ningxia Llactic Acid
Used Oil
China Industrial & Non Water Projects
It’s So Clear
IndiaIndiaIndiaIndia
22
India : Karnataka, W.Bengal & Gujarat
Bangalore Office
Chennai Office
Desalination
Waste Water
NeWater
Used Oil
Industrial Sales
It’s So Clear
MENA
24
Algeria – Tlemcen @ Souk Tlata
25
Algeria
� The largest project for Hyflux
� Consortium: Hyflux 20% & Malakoff 80%
� Project : AEC 49% Consortium (51%)� Hyflux’s Effective Shareholding 10.2%
� WPA 25 years concession� Capacity: 200,000 m3 / year� Financing by Algerian banks� Off-taker: L’Algerienne Des Eaux
(ADE)� Project:10 year Pioneer Tax Status� Corporate & VA Taxes waived� Custom Duties at Preferential Rate
� EPC: Exclusive to Hyflux @ US$205m
� Completion: 24 mths from financial close
Project Co.
20%80%
Malakoff MenaSpring
Consortium AEC
49%51%
Hyflux Ltd
100%
ADESonatrach Guarantee
WPAHyflux Algeria
EPC
Hyflux Ltd
100%
The Project
It’s So Clear
Consumer
27
New Biz Model / Products / Partners
� A Great Turnaround Story
� Extended Product Breadth To Cater To Various Market Segments
� New Commercial, Distribution and R&D Partnerships
� To be continued …
28
A Singapore R&D JV
R&D JVSingapore
Manufacturing JVChina
license
Hyflux Marmon
Hyflux Marmon Water
50% 50%
HyfluxMarmon
WaterExisting products
Existing products
South East Asia / India North America / Europe
license
Greater China
29
A China Manufacturing JV
Manufacturing JVChina
Hyflux Consumer Products Marmon Water
49% 51%
South East Asia / India North America / Europe
Hyflux MarmonDirect Sales & Marketing
To Greater China
Sales Channels Sales Channels
� Global Distribution Channel for Joint Technologies
� Complimentary Products & Market Segments
� Breakthrough & New Applications
� Global HQ Singapore USA
� Territory Asia Pacific North America & Europe
� Residential Point of Use Point of Entry
� Products Gurgle / Pitcher Softener
� Industrial Hollow Fibers Stainless Steel
It’s So Clear
Used Oil Recycling
32
Current Used Oil Projects
Completed – ESK Singapore
In Progress
In Prelim Discussion
It’s So Clear
Industrial Sales
34
Industrial Sales & Process Application
35
Funding Growth : Business Trust
� 1st Milestone
– Structured financing
– SingSpring � CitySpring Trust
– S$8 million capital gain from 20% divestment
– 1st right of refusal projects in China from Hyflux
– IPO at current yield of 6.75% now trading at 4%
– Holding 30% of SingSpring trust units
� A Platform to fund Pipeline growth
– China
– India and Southeast Asia
36
2006 Summary
� Municipal Performance : Short Term Impact
� Very Strong Industrial Sales
� Very Strong Order Book
� Algeria : The Largest Project
� Investing For Future : People & Geo
� New pillar of Growth : Used Oil Recycling
� New JVs : Marmon / Hyflux Consumers
� Emphasis on O&M recurring revenues
� New Funding Platform : Biz Trust
30% CAGR (2003-2008)
Wat
er U
tiliti
es
Indu
stria
l
Oil
/ Rec
yclin
g
Financial CapabilityOperational Capability
TechnologyHum
an
Cap
ital
Singapore / SE AsiaChina
India, MENA
Con
sum
er
Presented by Sam OngGroup EVP & Chief Investment Officer
OutlookOutlook
38
Outlook : Outlook : 5-Yr CAGR On Track
0000
10101010
20202020
30303030
40404040
50505050
60606060
70707070
80808080
2003200320032003 2004200420042004 2005200520052005 2006200620062006 2007200720072007 2008200820082008
PATPATPATPAT
30% CAGR30% CAGR30% CAGR30% CAGR
Strong Pipeline to deliver CAGR growth of
30% over 5 year period from
2003 - 2008
Presented by Sam OngGroup EVP & Chief Investment Officer
Executing & Restructuring Projects for GrowthExecuting & Restructuring Projects for Growth
40
2007 Focus2007 Focus
(1) Executing Projects
(2) Restructuring Projects into Trust
(3) Capitalizing Technology
41
OutlookOutlook
On track to deliver CAGR growth of 30% over 5 year period from
2003 - 2008
Q&A SessionQ&A Session