EOC's FY11 EARNINGS UNDERPINNED BY OFFSHORE PRODUCTION DIVISION

- Income from production & storage fleet and prudent working capital management boosts net cashflow from operations to US$42.8m

- Continued focus on growing recurrent income stream via long term lease contracts and increasing FPSO fleet

- Expects buoyant demand for FPSOs and FSOs as more E&P spending moves into deeper water and marginal fields

The strong performance of the offshore production division of EOC Limited (EOC or the Group), one of Asia’s leading providers of offshore production services to the oil and gas (O&G) sector, underpinned the Group’s earnings for the financial year ended in 31 August 2011(FY11).  

The production division contributed a pre-tax profit before unallocated expenses of US$23.4 million, 45% higher than FY10’s US$16.1 million, on revenue of US$80.5 million. This, together with its continued focus on efficient working capital management, largely improved the Group’s net cash flow from operating activities from US$28.2 million to US$42.8 million in FY11.

The Group also reported a 57% increase in revenue to US$178.1 million despite the frictional deployment of its construction fleet. Net profit, however, dipped to US$17.6 million against FY10’s US$20.8 million mainly due to higher income tax provisions and interest expenses. The latter is on the back of higher interest margins on a portion of its loans. EOC’s total net interest bearing debt remained at around the US$314.5 million level and its earnings generated a healthy interest cover of 5.2 times.

Mr Lim Kwee Keong, EOC’s Chief Executive Officer, said: “EOC’s sturdy performance demonstrates our ability to manage and execute production projects well. The recent commencement of first oil production by our second FPSO, Lewek EMAS, in Vietnam’s Chim Sao field, further strengthens our operational track record.

We will continue to focus on growing our recurrent income stream by rationalising ‘lump-sum’ type projects into long term lease contracts and realigning our resources and capabilities to grow our production and storage fleet. In addition, we will also continue to explore opportunities to expand into Europe and West Africa with strategic partners for this segment.”

In June 2011, EOC made headway out of its existing Southeast Asian market when it clinched an accommodation and support services contract for an offshore maintenance project in Africa. The Group also added Chevron Corporation, one of the world’s leading energy companies, to its growing clientele this year when the latter’s Thai subsidiaries awarded a contract to EOC.

On the prospects of the offshore production and storage sector, Mr Lim commented: “With oil companies forecast to spend a growing portion of their increased E&P budgets on deeper water and marginal fields to boost their reserves, we expect buoyant demand for FPSOs and FSOs (Floating Storage and Offloading vessels) as their mobility and operational characteristics are best suited for such environment.” 

ABOUT THE COMPANY
www.emasoffshore-cnp.com

Oslo Børs listing: October 2007

EOC Limited offers offshore floating production services that supports the life cycle of offshore oil & gas (O&G) production. It owns and operates two floating production, storage and offloading (FPSO) vessels, the Lewek Arunothai and the Lewek EMAS and a fleet of construction vessels. It has current operations and has operated in Australia, Brunei, India, Indonesia, Malaysia, the Middle East, the Philippines, Vietnam and Thailand.

EOC’s successful operational and HSE (health, safety and environment) track records have enabled the Group to establish strong working relationships with leading international oil majors, national oil companies and various independent operators. In addition, these ties have also brought in a steady stream of repeat business and recurring income.

The Group is also an associate company of Singapore Exchange-listed Ezra Holdings Limited, a leading global offshore contractor and provider of integrated offshore solutions to the O&G industry.  

FOR FURTHER ENQUIRIES

Mr. Chan Eng Yew
EOC Limited
65 9792 8616
engyew.chan@emasoffshore-cnp.com

Ms. Carol Chong
Oaktree Advisers
65 9475 3167
carolchong@oaktreeadvisers.com

Ms. Nora Cheng
Oaktree Advisers
65 9634 7450
noracheng@oaktreeadvisers.com

Other media releases on the company can be accessed at www.oaktreeadvisers.com