At MTQ’S AGM, the board of directors addressed questions by shareholders on its newly-acquired subsidiary, Neptune Marine Services. L-R: independent director Chew Soo Lin, lead independent director Nicholas Cocks, non-executive chairman Kuah Kok Kim, Group CEO Kuah Boon Wee. Photo by Sim Kih
Time & date: 10am, 26 July 2013
Venue: Carlton Hotel
AT MTQ CORPORATION’S AGM, shareholders asked for more information on the impact that its newly-acquired subsidiary, Neptune Marine Services, had on the Group.
MTQ specializes in engineering solutions for the offshore oil & gas sector. It has 3 business segments:
1. Oilfield Engineering, which contributed S$94.7 million to Group revenue in FY2013;
2. Engine Systems, which contributed S$55.2 million to FY2013 Group revenue
3. Neptune, which was acquired in FY2013 and contributed S$58.8 million to FY2013 Group revenue
FY2013 Group revenue was S$208.7 million, up 63% year-on-year, while net profit attributable to shareholders was up 48% at S$21.6 million.
Services provided by its Oilfield Engineering division include oilfield equipment supply, equipment component manufacturing, oilfield equipment design and engineering, equipment recertification / rig inspections, and general oilfield fabrication.
Its Engine Systems division is the leading independent supplier of turbocharger and fuel injection parts and services in Australia with a nationwide network.
Neptune’s core activities are in diving, inspection, repair and maintenance, geomatics (seabed survey) and remotely operated vessel (ROV) services.
Most of Neptune’s services are deployed in the subsea operating environments in Australia, as well as in the UK and other parts of the world.
There was a strong turnout of shareholders at MTQ'S AGM which was held at Carlton Hotel on Fri morning. Photo by Sim Kih
Below is a summary of questions raised by shareholders at the AGM and the replies provided by non-executive chairman Kuah Kok Kim, Group CEO Kuah Boon Wee, and Group CFO Dominic Siu.
Q: The commentaries in your financial results announcements have become very brief. What are the merits for such brevity instead of providing pertinent information that is as comprehensive as possible?
Dominic: Our numerical disclosure is very comprehensive. Neptune is separately listed on ASX and we have to make sure there is no selective disclosure of material information that Neptune has not announced.
Kuah Boon Wee: We have to weigh investor desire to know more details with commercial sensitivity re customers and competitors.
Q: Does the MTQ board have domain knowledge of Neptune's subsea service to manage the business well?
Kuah Kok Kim: Yes, we do. We are working with Neptune very closely. We acquired Neptune in order to go into a different segment to expand our involvement in the oil and gas sector.
MTQ'S Oilfield Engineering division is a niche player in Blow-out Preventors for oilrigs.
Company photo
Q: Are you considering other M&A?
Kuah Kok Kim, non-executive chairman, MTQ. Photo by Sim KihKuah Kok Kim: We are mindful of growing in the subsea space that we are in without over-stretching our balance sheet. We will strike a balance between M&A expansion, managing our gearing within reasonable limits and ability to pay dividends.
Q: What is your gearing ratio going to look like?
Kuah Kok Kim: Our net gearing is still healthy - below 20%. We will be mindful that we do not over-borrow.
Q: Why is your dividend unchanged even though your profits have surged? What is your dividend policy going forward?
Kuah Kok Kim: When deciding the dividend amount, we need to consider the funding requirement of the business as well as the possibility of M&A needs. The current dividend we are paying is slightly higher and bonus shares allotted in July 2013 are also entitled to the 2-cent per share dividend for FY2013.
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