SAILING THE SEAS OF SUCCESS - Swissco Holdings Limited

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CHAIRMAN’S STATEMENT Dear Fellow Shareholders, I take great pleasure to present to you the first Annual Report of our Company for the financial year ended 31 December 2004 (“FY04”) since its incorporation on 29 January 2004. This is also my first Annual Report that I am presenting to you as Chairman of the <strong>Swissco</strong> Group of Companies (“the Group”). Corporate Milestone Our Group achieved a significant milestone in its corporate history in FY04. On 3 November 2004, we launched our Initial Public Offer (IPO) of 45 million shares. The response from the public was excellent and we succeeded to raise twelve (12) million dollars (including the sale of Vendor’s shares). The shares were officially traded on the Singapore Exchange Securities Trading <strong>Limited</strong> Dealing and Automated Quotation System (SGX-SESDAQ) on 16 November 2004. As disclosed in the IPO Prospectus, a significant amount of the proceeds received by the Company would be used to partially finance the acquisition of vessels in line with our fleet expansion plan and expected to be delivered to us in FY05. Personally, it is a gratifying year for me too. After 34 years since I founded the business, I saw the Group attaining its new status of a listed company and in the process, transforming itself from being a family run business to a professionally managed corporation. I am confident that the Group would grow from strength to strength in the years ahead. Business Review I am pleased to report that for FY04, we continue to maintain our profitable performance albeit on lower turnover and profits. The drop in turnover is attributable to the lower charter income caused by fewer vessels in operations. Because of the buoyant marine and oil and gas industries, the demand for our vessels in the used tonnage market was robust. We therefore took the opportunity to dispose of our older vessels which are being replaced by new tonnages currently on order. The Group’s lower turnover and profits came from our marine logistics support business to the maritime and oil and gas industries. As we had fewer vessels to offer to our customers, we had to charter in third party vessels which eroded our gross profit margins. However, the gains made from the disposal of vessels compensated for the lower gross margins. I would like to take the opportunity to elaborate on the role of our associated companies within the Group. Our associated companies engage in ship chartering and ship engineering services in the oil and gas industry in certain geographical segment. They utilise third party vessels as well as our vessels in their operations. Hence, in reviewing the Group’s overall performance, cognizance should be given to their contribution in complementing the performance of our marine logistics support business. SWISSCO INTERNATIONAL LIMITED_2
CHAIRMAN’S STATEMENT “Our Group expects the marine industry to remain buoyant in the current year. With oil prices at current levels, growth in the oil and gas sector would likely be sustained. “ In our other core business of ship repair and maintenance, we recorded an increase in both turnover and profits. As you may be aware, the maritime business is presently enjoying an uptrend and this, in turn, translates to more repairs and maintenance being carried out. Together, with greater cost control efforts and measures, we were able to improve the efficiencies of the business. Our Group will continue to strive to achieve greater operational efficiencies. Strategic Growth Directions As a newly listed Company, we are aware of the challenges facing us. We will focus on laying the foundation for future expansion in our growing business sectors and at the same time, generating organic growth. We believe that the key factors for our success would be our ability to stay customer-focused and results-oriented as well as being a niche player in the competitive marine logistics support business. During the year, the Group has begun to look in earnest for opportunities to expand into new markets, seek strategic alliances and increase the fleet size especially for more specialised vessels capable to support a wider range of services required by the offshore oil and gas industry. Pursuant to our fleet expansion programme and in line with our fleet renewal policy, we will continue to build up our fleet to strive to reach an optimal operating size. However, considerations would be given to market conditions in our expansion plan. expected to cater to clients’ needs and requirements and thus attract better charter terms due to the wider range of services they can perform. We can expect favourable contributions from the new vessels progressively as and when they join the fleet. Pivotal to the success of our business would be operational efficiencies and vessels utilisation. In this aspect, our Group will continually strive to achieve greater cost and operational efficiencies and at the same time, maximise vessels’ utilisation. Towards these objectives, we have instituted tighter cost and credit control programmes and introduced rationalisation and streamlining processes in our operations within the Group. Our Group expects the marine industry to remain buoyant in the current year. With oil prices at current levels, growth in the oil and gas sector would likely be sustained. Consequently, we expect demand for offshore support vessels and barges as well as ship repairs and maintenance to continue to be robust in FY05. Hence, our Group is likely to continue to enjoy this uptrend and can look forward to yet another profitable year. Acknowledgement and Appreciation It remains for me, on behalf of the Board, to thank our management and staff for their commitment, efforts and contribution during the year. We would also like to thank and acknowledge the continuing support of our customers, shareholders, business partners and suppliers. We look forward to their ongoing contribution and support in the coming year as we progress with the growth of our Group. Yeo Chong Lin Chairman Our Group will also be exploring with our business partners to restructure our associated companies, which have been playing a vital role in support and growth of our business, to optimise the contributions made by them. Business Outlook As part of our fleet expansion programme and in line with our fleet renewal policy, we will be taking delivery of 14 vessels throughout FY05. The new vessels comprise 5 barges and 4 offshore boats being built in China, 4 work boats in Singapore and 1 work boat in Malaysia. Upon delivery of the 14 vessels, they will join our existing fleet and this will bring our fleet size to over 32 vessels by year end. The new buildings being specialised vessels are ANNUAL REPORT 2004_3
Page 1 and 2: SWISSCO SAILING THE SEAS OF SUCCESS
Page 3: GROUP STRUCTURE 100% 100% Swissc
Page 7 and 8: CORPORATE PROFILE Out Port Limit (O
Page 9 and 10: OUR HISTORY our business to support
Page 11 and 12: BOARD OF DIRECTORS Mr Yeo Chong Lin
Page 13 and 14: CORPORATE INFORMATION BOARD OF DIRE
Page 15 and 16: OPERATIONS REVIEW Our Group’s two
Page 17 and 18: our vessels OUT PORT LIMIT (OPL) BO
Page 19 and 20: CORPORATE GOVERNANCE REPORT Swissco
Page 21 and 22: CORPORATE GOVERNANCE REPORT Interna
Page 23 and 24: DIRECTORS’ REPORT Directors’ co
Page 25 and 26: STATEMENT BY DIRECTORS In the opini
Page 27 and 28: CONSOLIDATED INCOME STATEMENT FOR T
Page 29 and 30: CONSOLIDATED STATEMENT OF CHANGES I
Page 31 and 32: NOTES TO THE FINANCIAL STATEMENTS F
Page 55 and 56:
STATISTICS OF SHAREHOLDINGS AS AT 1
Page 57 and 58:
NOTICE OF FIRST ANNUAL GENERAL MEET
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NOTICE OF FIRST ANNUAL GENERAL MEET
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SWISSCO INTERNATIONAL LIMITED (Inco
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SWISSCO Swissco International Limit
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