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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Plant Offshore | LSE:POGL | London | Ordinary Share | JE00B1XVTV01 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.01 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMPOGL
RNS Number : 1594T
Plant Offshore Group Ltd
02 June 2009
Plant Offshore Group Limited
Full Year Results for the Year Ended 31 December 2008
Plant Offshore Group Limited ("POGL" or "the Company"), an AIM quoted company
that provides Engineering, Procurement and Construction Management ("EPCM")
services to the oil and gas, renewable energy and related industries, today
announces its full year results for the year ended 31 December 2008.
Financial Highlights
+-------------------+------------------------+---------------------+-----------+
| | 2008 | 2007 | % change |
+-------------------+------------------------+---------------------+-----------+
| Revenues | RM64.8m (GBP10.6m*) | RM96.3m | -33 |
| | | (GBP14.0m**) | |
+-------------------+------------------------+---------------------+-----------+
| Operating Profit | RM5.1m (GBP0.8m*) | RM16.6m (GBP2.4m**) | -69 |
+-------------------+------------------------+---------------------+-----------+
| Profit before Tax | RM4.8m (GBP0.8m*) | RM16.3m (GBP2.3m**) | -71 |
| | | | |
+-------------------+------------------------+---------------------+-----------+
| Basic EPS | RM0.030 (0.46p*) | RM0.088 (1.29p**) | -68 |
+-------------------+------------------------+---------------------+-----------+
Note:
*RM6.13:GBP1 (average month-end exchange rate from January to December 2008)
**RM6.865:GBP1 (average month-end exchange rate from January to December 2007)
Mr Cho Nam Sang, Chairman of POGL, commented:
"The 2008 financial year has been a challenging year due to the global economic
slowdown. Despite the competitive business environment, the performance of POGL
was commendable. 2009 looks set to be equally challenging but we strongly
believe that investment in oil and gas will hold up and POGL is well placed to
benefit from this, particularly once the global economy recovers".
The Annual Report and Accounts for the period ending 31 December 2008 together
with the Notice convening the Annual General Meeting scheduled for 29 June 2009
are due to be sent to shareholders on 8 June 2009.
For further information:
Plant Offshore Group Limited
Mr. Hang Chin Juan, CEO Tel:
+603 7805 5001
hang_cj@plantoffshore.com www.plantoffshore.com
Mr. Kenneth Chai, Head of Corporate
kenneth_cct@plantoffshore.com
HB Corporate Limited
Luke Cairns, Director, Corporate Finance Tel:
+44(0)20 7510 8600
L.Cairns@HBcorporate.co.uk www.hbcorporate.co.uk
Threadneedle Communications
Josh Royston / Graham Herring Tel:
+44(0)20 7653 9850
About POGL:
POGL is the holding company of an established and profitable group of companies
engaged in the business of providing integrated, multi-discipline EPCM services
to the oil and gas (onshore and offshore), petrochemical, biodiesel, energy and
other related industries. The group operates primarily in the ASEAN region but
this focus is expanding, with the group having won contracts in the Middle East.
The services of POGL are focused on EPCM services. This is broken down and
incorporates the following features:
- Engineering "E" - specialist engineering design services;
- Procurement "P" - the procurement of the relevant materials and equipment
to meet design specifications such as skid and process equipment; and
- Construction Management "CM" - the management on a client's behalf of the
construction or fabrication of a project. The services can be provided, together
with more general Project Management, either in totality or partially dependent
on the client's requirements. In addition POGL supplies industry specialists to
the oil and gas and related industries.
POGL listed on AIM, a market of the London Stock Exchange, in July 2007. For
more information on the company, please visit www.plantoffshore.com.
Chairman's Statement
It gives me great pleasure to present to you the Group's audited financial
results for the financial year ended 31 December 2008. Whilst trading conditions
were difficult, and continue to be so, I am delighted to report that the Group
has continued to be profitable.
I am pleased to announce that the Company was selected by Forbes editors as one
of the "Best Under A Billion" companies listed in the Forbes Asia 29 September
2008 issue. Forbes Asia's "Best Under A Billion" companies are Asia Pacific's
top small and midsize listed companies with revenue of less than USD1 billion.
Forbes editors picked the group of 200 companies with consistent profitability
and growth over three years.
2008 Financial Results
2008 was a challenging year for the Group as the global economic outlook became
increasingly uncertain. As a result, in the period under review, the Group's
financial performance was down on 2007's. Revenues were RM64.9 million, a
decrease of 33% compared to RM96.3 million for 2007. Operating profit decreased
by 70% to RM5.1 million (2007: RM16.6 million). Profit before tax decreased by
71% to RM4.8 million (2007: RM16.3 million). Basic earnings per share decreased
by 68% to RM0.030 (2007: RM0.088).
The increasingly competitive marketplace has seen pressure on margins. Players
in the marketplace are now chasing fewer contracts as contract awarders delay
the award or downsize the contracts. Generally, gross margin of oil and gas
contracts used to be between 25-30% but today has declined to between 15-20%.
Outlook
The period under review has clearly been affected by the much publicised
downturn in the global economy. The price of crude oil has fallen to a low of
USD32 per barrel and has since recovered to around USD60 per barrel compared to
its peak of USD147 per barrel in July 2008. With improving economic outlook and
in anticipation of economic recovery, major oil and gas companies are taking a
long term view in their investment in oil and gas projects. That said, with less
projects being commissioned the competition is increased and this, in turn, can
put pressure on margins as competitors for work seek to undercut one another.
Furthermore the Group, in keeping with the rest of the market, has seen certain
projects delayed whilst the economic uncertainty remains.
We strongly believe that investment in oil and gas will hold up. We also believe
that the Group is well placed to benefit from the much anticipated increase in
the demand for oil once the global economy recovers, as this should lead to
greater demand for our Engineering, Procurement and Construction Management
("EPCM") services.
We shall continue to focus on the provision of EPCM services to the oil and gas,
renewable energy and related industries. We currently have tenders out for
contracts worth over RM355m, which are largely for renewable energy and offshore
oil and gas projects.
Whilst the oil and gas sector continues to provide the majority of contracts,
one area the Group is focussing on is the growing biodiesel industry. Over
dependence on petroleum oil has created environmental concerns, economic and
energy security issues, as well as the depletion of worldwide oil reserves. This
has prompted the governments of many countries to mandate the use of renewable
energy such as biodiesel. Biodiesel is a form of clean energy that undoubtedly
helps considerably in combating climate change and global warming. Cleantech,
which includes solar, wind, geothermal, biofuels, water and materials that
marries environmental benefits and energy efficiency with the needs of the
demand side, could revolutionise the economy and thus presents an invaluable
opportunity for us.
Conclusion
2008 has been an exciting and challenging year for our company. I am pleased
with the commendable performance of the Group for the financial year ended 31
December 2008, given the challenges of the global economic turmoil. Whilst 2009
looks set to be equally challenging we have a number of large tenders out as
well as reasonable work in progress and I am confident POGL has a bright future.
On behalf of the Board of Directors, I would like to record my appreciation to
the management and staff for their efforts and strong dedication.
Cho Nam Sang
Chairman
28 May 2009
Operations Review
I am very pleased to report that the Group has made solid progress during the
year under review. During the year, our Group has improved its operations and
expanded overseas via strategic investments and joint-ventures. A summary of the
Group's main business operations and commentary on their performance is provided
below:-
Plant & Offshore Technology Sdn Bhd ("POT")
POT's EPCM division continues to be the largest revenue contributor to the
Group, where it secures and executes EPCM services contracts mainly in the South
East Asian region. Our extensive experience in EPCM has led to the receipt of
three contracts in 2008 for renewable energy and oil and gas projects in
Malaysia and Indonesia worth in excess of RM100m. In the period under review,
POT has completed a number of EPCM projects for oil and gas companies in
Malaysia. In addition, our strong collaboration with Oilfab Sdn Bhd, one of the
six fabricators licensed by Petronas, the national oil company of Malaysia, has
lead to further contracts by this fabricator.
During the year, POT has completed the detailed engineering and design work for
a new 100,000 MTPY Biodiesel Plant in Kuantan, Pahang. Currently, another two
biodiesel plant projects are in progress, with completion expected in 2009 and
2010 respectively.
In addition, POT's supply of specialists division performed considerably well in
the period under review where it contributed revenue of over RM10m. This
division supplies specialist manpower such as geologists, engineers, technicians
and welders to the oil and gas industry. We continue to work closely with major
oil and gas players such as Technip and SAIPEM.
I-Intelek Sdn Bhd ("I-Intelek")
I-Intelek is a MSC status company which conducts research and development and
customisation of various engineering design software. It develops software for
pressure vessels, heat exchangers, oil tanks, pumps and piping systems and
thereby supports POT's EPCM services. I-Intelek's sole revenue contributor is
POT, where I-Intelek provides POT with customised engineering design software to
meet POT's specific design requirements for its contracts. During the year under
review, it has completed the development of engineering design software for
pressure vessels (PRO PV 2008) and storage tanks (PRO TANK 2008). The Company
was also awarded four Original Certificates for Trademark (Pro-PV under class 9
and 16 and Pro-TANK under class 9 and 16) by the Intellectual Property
Corporation of Malaysia for a period of ten years.
Other Business Development
The Group's other areas of development are via its three subsidiaries Plant
Offshore Pty Ltd ("POPL"), Rubber Seismic Isolators LGM Sdn Bhd ("RSI") and PT
Indoland Bangun Sejahtera ("IBS"). None of these divisions made a contribution
in 2008.
POPL has been established in Australia to supply specialised advanced
technologies in marginal oil and gas field recovery and floating oil production
facilities to the Australian, Middle Eastern and Asian markets. POPL has
tendered for some contracts in the Middle East and is currently awaiting
results.
RSI is the Company's joint venture company with EK Polymers Sdn Bhd, a
unit within the Malaysian Rubber Board ("MRB"). The MRB, which is a body
established by the Malaysian government, is a world leader in rubber
technology. RSI holds worldwide marketing and sale rights for products using
rubber seismic isolation technology to minimize the impact of earthquakes. We
have, therefore, focused our immediate business development plan on earthquake
prone countries such as China, Japan, Indonesia, Middle East and the USA as
obvious targets for our products and services. RSI is currently establishing a
representative office in Fuzhou, Fujian Province, China. The representative
office will facilitate our business objective to penetrate the vast China
market.
IBS is a joint-venture company between POT and PT Techniteam Indonesia
("TI"), and is principally involved in property development. At present, IBS is
negotiating with an Indonesian company to embark on a property development
project in Indonesia. The global credit crunch has temporarily delayed these
negotiations.
Further to these interests, in September 2008, the Company subscribed for
917,168 Convertible Preference Shares of Renewable Fuel Corp Inc ("RFC") at an
issue price of USD10 per share. The purchase was satisfied by the conversion of
debt totaling RM32 million which RFC's subsidiary, Century Corp Sdn Bhd, had
owed POT, a subsidiary of the Company. RFC owns a modern plant in Kuantan,
Malaysia that produces biodiesel to ASTM and EN standards. In addition, RFC has
a license to distribute diesel fuel in the USA. RFC is setting up another two
biodiesel plants in Indonesia. RFC is poised to be a leading producer of
biodiesel in the world within the next few years with total production capacity
of 600,000 MT per year.
Current Trading
Consistent with the global economic slowdown, the first few months of 2009 have
been comparatively slow for us and we expect 2009 to be a challenging year for
our business. In view of this, we are continuously seeking to improve our
operations and manage costs. The current oil price has seen a number of project
deferrals and delays within the industry which cannot help but have an adverse
effect on current trading. Furthermore with competition quoting more
aggressively for tenders we expect increased pressures on our profit margins.
The Company continues to seek new partners with whom to grow the business and
has recently entered in a Memorandum of Understanding with RBS International to
work together on EPC business in Malaysia and the ASEAN Region whereby each
party shares resources and its specific expertise in the pursuit of projects in
the region. RBS International is a Middle East-based EPCM services provider
focusing in the oil and gas industry.
However, we are progressing well with our ongoing contracts and remain
optimistic to secure further contracts in due course with tenders out totaling
over RM355m. The Group continues to pursue its strategy of entering into new
geographical markets, expanding through joint ventures and growing market share
in existing markets.
Hang Chin Juan
Chief Executive Officer
28 May 2009
Consolidated Income Statement for the Financial Year Ended 31st December 2008
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| | 2008 | | 2007 |
+------------------------------------+------------------+--+-----------------+
| | RM | | RM |
+------------------------------------+------------------+--+-----------------+
| CONTINUING OPERATIONS | | | |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Revenue | 64,843,504 | | 96,270,135 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Cost of sales | (53,203,952) | | (75,816,300) |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| GROSS PROFIT | 11,639,552 | | 20,453,835 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Other operating income | 53,474 | | 291,514 |
+------------------------------------+------------------+--+-----------------+
| Administration expenses | (5,630,285) | | (3,605,774) |
+------------------------------------+------------------+--+-----------------+
| Other operating expenses | (955,244) | | (569,747) |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| OPERATING PROFIT | 5,107,497 | | 16,569,828 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Finance costs | (264,108) | | (292,068) |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| PROFIT BEFORE TAX | 4,843,389 | | 16,277,760 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Tax | (130,630) | | (2,120,755) |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| PROFIT FOR THE YEAR | 4,712,759 | | 14,157,005 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Attributable to: | | | |
+------------------------------------+------------------+--+-----------------+
| Equity holders of the Company | 4,939,008 | | 14,173,744 |
+------------------------------------+------------------+--+-----------------+
| Minority interests | (226,249) | | (16,739) |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| PROFIT FOR THE YEAR | 4,712,759 | | 14,157,005 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| EARNINGS PER SHARE | | | |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
| Basic earnings per share | 0.0296 | | 0.0884 |
+------------------------------------+------------------+--+-----------------+
| Diluted earnings per share | 0.0296 | | 0.0884 |
+------------------------------------+------------------+--+-----------------+
| | | | |
+------------------------------------+------------------+--+-----------------+
Consolidated Balance Sheet as at 31 December 2008
+--------------------------------------------------+---+--------------------+--------+--------+--------+--------------------+----------+
| | | | | Restated |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | 2008 | | 2007 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | RM | | RM |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| ASSETS | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Non-current assets | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Intangible assets | | 7,978,726 | | 5,701,925 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Property, plant and equipment | | 5,157,920 | | 4,421,273 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Unquoted investment | | 32,000,000 | | - |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | 45,136,646 | | 10,123,198 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Current assets | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Property development costs | | 170,438 | | 127,104 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Trade receivables | | 6,724,508 | | 54,329,767 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Other receivables | | 3,758,768 | | 3,569,021 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Amount due from customers on contract works | | | | |
| | | 7,395,826 | | 10,002,031 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Cash and bank balances | | 839,862 | | 1,297,068 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Tax recoverable | | 762,163 | | - |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | 19,651,565 | | 69,324,991 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| LIABILITIES | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Current liabilities | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Trade payables | | 18,687,988 | | 30,989,586 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Other payables | | 833,302 | | 766,513 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Amount due to customers on contract works | | 500,772 | | 5,852,778 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Amount due to directors | | 54,060 | | 5,000 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Borrowings - secured | | 4,520,113 | | 4,366,399 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Tax payable | | - | | 1,560,838 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | 24,596,235 | | 43,541,114 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| NET CURRENT (LIABILITIES) / ASSETS | | | | |
| | | (4,944,670) | | 25,783,877 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Total assets less current liabilities | | 40,191,976 | | 35,907,075 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Non-current liabilities | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Borrowings - secured | | 1,042,234 | | 1,505,756 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Deferred tax liabilities | | 265,211 | | 101,293 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| Amount due to director | | 548,163 | | 548,163 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | 1,855,608 | | 2,155,212 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | | | |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| NET ASSETS | | 38,336,368 | | 33,751,863 |
+--------------------------------------------------+---+--------------------+-----------------+----------------------------------------+
| | | | | | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| SHAREHOLDERS' EQUITY | | | | | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| | | | | | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Equity attributable to equity holders of the | | | | | |
| Company: | | | | | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Called up share capital | | 113,239 | | 113,239 | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Share premium | | 19,347,260 | | 19,347,260 | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Foreign currency translation reserve | | (154,643) | | (32,650) | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Reverse acquisition reserve | | (8,166,111) | | (8,166,111) | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Retained earnings | | 27,163,162 | | 22,224,154 | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| | | | | | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Shareholders' equity | | 38,302,907 | | 33,485,892 | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| Minority interest | | 33,461 | | 265,971 | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| | | | | | |
+--------------------------------------------------+---+-----------------------------+-----------------+--------------------+----------+
| TOTAL EQUITY | | 38,336,368 | | 33,751,863 | |
+--------------------------------------------------+---+--------------------+--------+--------+--------+--------------------+----------+
Consolidated Statement of Cash Flows for the Financial Year Ended 31st December
2008
+--+-------------------------------------------+--------------+--+-------------+
| | | | Restated |
+----------------------------------------------+--------------+--+-------------+
| | Year ended | | Year ended |
| | 2008 | | 2007 |
+----------------------------------------------+--------------+--+-------------+
| | RM | | RM |
+----------------------------------------------+--------------+--+-------------+
| | | | |
+----------------------------------------------+--------------+--+-------------+
| Cash generated from/(depleted in) operations | 6,824,690 | | (6,004,699) |
+----------------------------------------------+--------------+--+-------------+
| | Interest paid | (264,108) | | (292,068) |
+--+-------------------------------------------+--------------+--+-------------+
| | Interest received | 524 | | - |
+--+-------------------------------------------+--------------+--+-------------+
| | Taxes paid | (2,231,710) | | (1,323,995) |
+--+-------------------------------------------+--------------+--+-------------+
| | | | | |
+--+-------------------------------------------+--------------+--+-------------+
| Net cash generated from/(used in) operating | | | |
| activities | 4,329,396 | | (7,620,762) |
+----------------------------------------------+--------------+--+-------------+
| | | | | |
+--+-------------------------------------------+--------------+--+-------------+
| | Purchase of property, plant and equipment | (1,516,066) | | (473,854) |
+--+-------------------------------------------+--------------+--+-------------+
| | Purchase of intangible assets | (125,697) | | (125,289) |
+--+-------------------------------------------+--------------+--+-------------+
| | Acquisition of subsidiary companies | - | | 39,725 |
+--+-------------------------------------------+--------------+--+-------------+
| | Proceeds from disposal of property, plant | | | |
| | and equipment | 5,242 | | 215,500 |
+--+-------------------------------------------+--------------+--+-------------+
| | Addition to development costs | (2,784,799) | | (1,978,932) |
+--+-------------------------------------------+--------------+--+-------------+
| | | | |
+----------------------------------------------+--------------+--+-------------+
| Net cash used in investing activities | (4,421,320) | | (2,322,850) |
+----------------------------------------------+--------------+--+-------------+
| | | | |
+----------------------------------------------+--------------+--+-------------+
| | | | | |
+--+-------------------------------------------+--------------+--+-------------+
| | Drawdown of short term borrowings | 296,000 | | 2,007,000 |
+--+-------------------------------------------+--------------+--+-------------+
| | Repayment of term loan | (133,916) | | (359,982) |
+--+-------------------------------------------+--------------+--+-------------+
| | Repayment of hire purchase payables | (360,502) | | (124,603) |
+--+-------------------------------------------+--------------+--+-------------+
| | Proceeds from issuance of ordinary shares | - | | 9,258,170 |
+--+-------------------------------------------+--------------+--+-------------+
| | | | |
+----------------------------------------------+--------------+--+-------------+
| Net cash (used in)/generated from financing | (198,418) | | 10,780,585 |
| activities | | | |
+----------------------------------------------+--------------+--+-------------+
| | | | |
+----------------------------------------------+--------------+--+-------------+
| (Decrease)/increase in cash and cash | (290,342) | | 836,973 |
| equivalents | | | |
+----------------------------------------------+--------------+--+-------------+
| Effect of foreign exchange rate changes | (59,225) | | 8,739 |
+----------------------------------------------+--------------+--+-------------+
| Cash and cash equivalents at beginning of | 1,116,605 | | 270,893 |
| year | | | |
+----------------------------------------------+--------------+--+-------------+
| Cash and cash equivalents at end of year | 767,038 | | 1,116,605 |
+----------------------------------------------+--------------+--+-------------+
| | | | |
+--+-------------------------------------------+--------------+--+-------------+
Notes to the Report for the Financial Year Ended 31st December 2008
1. Significant Accounting Policies
(a) Basis of preparation and accounting policies - The financial information
contained in the results has been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union. Full
details of the accounting policies adopted which are consistent with those
disclosed in the Company's AIM Admission Document are included in the financial
statements for the year ending 31st December 2008.
(b)Revenue recognised for contract is in accordance to IAS 11 - Construction
Contracts. Where the outcome of a contract work can be reliably estimated,
contract revenue and contract costs are recognised as revenue and expenses
respectively by using the stage of completion method. The stage of completion is
measured by reference to the proportion of contract costs incurred for work
performed to date to the estimated total contract costs. Where the outcome of a
contract work cannot be reliably estimated, contract revenue is recognised to
the extent of contract costs incurred that it is probable will be recoverable.
Contract costs are recognised as expenses in the period in which they are
incurred. When it is probable that total contract costs will exceed total
contract revenue, the expected loss is recognised as an expense immediately.
The consolidated financial information is presented in RM (Ringgit Malaysia)
because the group is expected to transact more of its business in RM (functional
currency) than any other currency.
The highlighted financial information has been translated using the following
exchange rate: RM6.13:GBP1 (average month-end exchange rate from January to
December 2008).
2. Nature of Financial Information
The financial information contained in the results for the year ended 31st
December 2008 is audited.
3. Going Concern and Impairment
The financial statements have been prepared on the assumption that the Group is
a going concern. When assessing the foreseeable future, the directors have
looked at a period of twelve months from the date of approval of this report.
The directors are currently in the process of negotiating further bank funding
to assist the Group with its future working capital requirements. These
discussions are progressing positively and as of 27 May 2009, the company
received written indicative terms from a Malaysian bank subject to final
evaluation and approval, which the directors are confident can be finalised very
shortly.
In addition, two major shareholders have undertaken to provide support to enable
the Company and Group to meet its debts as and when they fall due.
As part of the impairment review the directors have considered the basis of
valuation in respect of the unquoted investment and are of the opinion that no
adjustment is required as they consider the value to be reasonable based on the
assumption that Renewable Fuel Corp Inc ("RFC") is a going concern. However,
should RFC not be able to continue as a going concern the value of the
investment may need to be impaired.
After making enquiries, the directors have a reasonable expectation that the
Company and Group have adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the annual report and financial statements.
Were the Group to be unable to continue as a going concern or the investment in
RFC was to be impaired, adjustments would have to be made to the balance sheet
of the Group to reduce balance sheet values of assets to their recoverable
amounts, to provide for future liabilities that might arise and to reclassify
non-current assets and long-term liabilities as current assets and liabilities
which may cast significant doubt about the Group's ability to continue as a
going concern.
4. Taxation
The charge for income tax expense included in the results is based on the
audited results for the year ended 31st December 2008 and is calculated at the
expected rate applicable to the group for the full year ending 31st December
2008.
5. Earnings Per Share
Earnings per share is calculated by dividing the profit attributable to equity
shareholders for year ended 31 December 2008 by the weighted average number of
shares in issue in the period.
The profit attributable to equity shareholders in the year ended 31 December
2008 was RM4,712,759 (year ended 31 December 2007 : RM14,157,005). The weighted
average number of shares in POGL in issue in the year ended 31 December 2008 was
166,666,667, the weighted average number of shares in the year ended 31 December
2007 was 160,057,471 (per IFRS3, Appendix B, Paragraph B12-B15).
6. Contingent and Other Liabilities
The Directors are of the opinion that provisions are not required in respect of
these matters as either it is not probable that future sacrifice of economic
benefits will be required or the amount is not capable of reliable measurement.
+---------------------------------------------+------------------------------------------+---+------------------------------------------+
| | | | |
| | 2008 | | 2007 |
+---------------------------------------------+------------------------------------------+---+------------------------------------------+
| Unsecured: | RM | | RM |
+---------------------------------------------+------------------------------------------+---+------------------------------------------+
| Corporate guarantees given by a subsidiary | 5,075,000 | | 7,375,000 |
| company to licensed banks for credit | | | |
| facilities granted to another subsidiary | | | |
| company | | | |
+---------------------------------------------+------------------------------------------+---+------------------------------------------+
| Corporate guarantees given by a subsidiary | 1,051,000 | | 1,051,000 |
| company to a licensed banks in respect of | | | |
| property, plant and equipment acquired | | | |
| under hire purchase arrangement by another | | | |
| subsidiary company | | | |
+---------------------------------------------+------------------------------------------+---+------------------------------------------+
| | | | |
+---------------------------------------------+------------------------------------------+---+------------------------------------------+
7. Dividends
The Directors do not recommend the payment of any dividend in respect of the
year ended 31 December 2008.
8. Changes in Equity
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+--+--+--+
| ------------------------- Distributable | | | |
| Non-Distributable | | | |
| --------------------- | | | |
| Share Share Foreign Reverse Retained Total Minority Total | | | |
| Capital Premium Acquisition Earnings Interest Equity | | | |
| Currency Reserve | | | |
| Translation | | | |
| Reserve | | | |
| RM RM RM RM RM RM RM RM | | | |
| At 1 113,239 19,347,260 (32,650) (8,166,111) 22,224,154 33,485,892 265,971 33,751,863 | | | |
| January | | | |
| 2008 | | | |
| Profit for - - - - 4,939,008 4,939,008 (226,249) 4,712,759 | | | |
| the | | | |
| financial | | | |
| year | | | |
| Foreign - - (121,993) - - (121,993) (6,261) (128,254) | | | |
| currency | | | |
| translation | | | |
| reserve | | | |
| At 31 113,239 19,347,260 (154,643) (8,166,111) 27,163,162 38,302,907 33,461 38,336,368 | | | |
| December | | | |
| 2008 | | | |
| | | | |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+--+--+--+
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
| At | 2,000,000 | - | - | - | 8,050,410 | 10,050,410 | 738 | 10,051,148 |
| 1 | | | | | | | | |
| January | | | | | | | | |
| 2007 | | | | | | | | |
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
| Profit | - | - | (32,650) | - | 14,173,744 | 14,141,094 | 16,739 | 14,157,833 |
| for | | | | | | | | |
| the | | | | | | | | |
| financial | | | | | | | | |
| year | | | | | | | | |
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
| Reverse | (1,898,339) | 10,064,450 | - | (8,166,111) | - | - | - | - |
| Acquisition | | | | | | | | |
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
| Issue | 11,578 | 9,282,810 | - | - | - | 9,294,388 | - | 9,294,388 |
| of | | | | | | | | |
| shares | | | | | | | | |
| in | | | | | | | | |
| POGL | | | | | | | | |
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
| Minority | - | - | - | - | - | - | 248,494 | 248,494 |
| interest | | | | | | | | |
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
| At | 113,239 | 19,347,260 | (32,650) | (8,166,111) | 22,224,154 | 33,485,892 | 265,971 | 33,751,863 |
| 31 | | | | | | | | |
| December | | | | | | | | |
| 2007 | | | | | | | | |
+-----------------------+-------------+-------------+----------+-------------+-------------+-------------+---------+-------------+
9. Changes in the Composition of the Group
During the financial under review, there was no change in the composition of the
Group.
10. Segmental Analysis
The Group is managed as two major separate divisions, EPCM and property
development. Others include those investment holding, dormant and other
segment.
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | EPCM | Property | Others | Total | EPCM | Property | Total | |
| | | development | | | | development | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | 2008 | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | RM | RM | RM | RM | RM | RM | RM | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Revenue | 64,843,504 | - | - | 64,843,504 | 96,270,135 | - | 96,270,135 | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Operating | 8,163,200 | (332,976) | (2,082,106) | 5,748,118 | 15,406,742 | - | 15,406,742 | |
| profit | | | | | | | | |
| before | | | | | | | | |
| amortisation | | | | | | | | |
| of | | | | | | | | |
| acquisition | | | | | | | | |
| related | | | | | | | | |
| intangibles | | | | | | | | |
| and share | | | | | | | | |
| based | | | | | | | | |
| payment | | | | | | | | |
| charges | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Amortisation | (694,415) | - | - | (694,415) | (141,399) | - | (141,399) | |
| of | | | | | | | | |
| acquisition | | | | | | | | |
| related | | | | | | | | |
| intangibles | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | 7,468,785 | (332,976) | (2,082,106) | 5,053,703 | 15,265,343 | - | 15,265,343 | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Other | | | | 53,794 | | | 1,304,486 | |
| operating | | | | | | | | |
| income | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Operating | | | | 5,107,497 | | | 16,569,829 | |
| profit | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Net | | | | (264,108) | | | (292,068) | |
| finance | | | | | | | | |
| expense | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Profit | | | | 4,843,389 | | | 16,277,761 | |
| before | | | | | | | | |
| tax | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Property, | 5,071,003 | 82,837 | 4,080 | 5,157,920 | 4,529,604 | 67,989 | 4,597,593 | |
| plant and | | | | | | | | |
| equipment | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Intangible | 7,978,725 | - | | 7,978,725 | 5,525,604 | - | 5,525,604 | |
| assets | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| Trade | 10,176,805 | 263,929 | 42,542 | 10,483,276 | 57,629,058 | 269,730 | 57,898,788 | |
| and | | | | | | | | |
| other | | | | | | | | |
| receivables | | | | | | | | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
| | 23,226,533 | 346,766 | 46,622 | 23,619,921 | 67,684,266 | 337,719 | 68,021,985 | |
+---------------------------+------------+-------------+-------------+------------+------------+-------------+------------+--+
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| | Malaysia | Rest of | Total | Malaysia | Rest | Total | |
| | | the | | | of the | | |
| | | world | | | world | | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| | RM | RM | RM | RM | RM | RM | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| | | | | | | | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| Turnover | 63,006,572 | 1,836,932 | 64,843,504 | 91,582,510 | 4,687,625 | 96,270,135 | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| Operating | 5,419,106 | (311,609) | 5,107,497 | 15,842,537 | 727,292 | 16,569,829 | |
| profit/(loss) | | | | | | | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| Net | 38,262,399 | 40,508 | 38,302,907 | 33,839,609 | (87,746) | 33,751,863 | |
| assets/(Net | | | | | | | |
| liabilities) | | | | | | | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
| | | | | | | | |
+----------------------------+------------+-----------+------------+------------+-----------+------------+--+
11. Unquoted Investment
+------------------------------------+----------+--------------+--------------+
| | | | Unquoted |
| | | | Investments |
+------------------------------------+----------+--------------+--------------+
| | | | RM |
+------------------------------------+----------+--------------+--------------+
| | | | |
+------------------------------------+----------+--------------+--------------+
| Opening cost | | | - |
+------------------------------------+----------+--------------+--------------+
| Opening unrealised gain/(loss) | | | - |
+------------------------------------+----------+--------------+--------------+
| Opening Valuation | | | - |
+------------------------------------+----------+--------------+--------------+
| | | | |
+------------------------------------+----------+--------------+--------------+
| Additions at cost | | | 32,000,000 |
+------------------------------------+----------+--------------+--------------+
| Disposal proceeds | | | - |
+------------------------------------+----------+--------------+--------------+
| Net profit/(loss) realised on | | | - |
| disposal | | | |
+------------------------------------+----------+--------------+--------------+
| Changes in fair value in the year | | | - |
+------------------------------------+----------+--------------+--------------+
| | | | 32,000 000 |
+------------------------------------+----------+--------------+--------------+
| | | | |
+------------------------------------+----------+--------------+--------------+
| Closing cost | | | 32,000,000 |
+------------------------------------+----------+--------------+--------------+
| Closing unrealised gain/(loss) | | | - |
+------------------------------------+----------+--------------+--------------+
| Closing valuation | | | 32,000,000 |
+------------------------------------+----------+--------------+--------------+
| | | | |
+------------------------------------+----------+--------------+--------------+
On 24 September 2008, POGL entered into a subscription agreement with Renewable
Fuel Corp Inc ("RFC") whereby RFC issued 917,168 new Series A Convertible
Preferred Stocks ("Preferred Stocks") of RFC at an issue price of USD10.00 per
Preferred Stock to POGL.
This subscription was to satisfy an amount of RM32,000,000 owing by Century Corp
Sdn. Bhd., a subsidiary company of RFC to the Company's subsidiary company,
Plant & Offshore Technology Sdn. Bhd. Based on the exchange rate of USD1.00:
RM3.489 as at 19 September 2008, the debts of RM32,000,000 is equivalent to
USD9,171,682. On this basis, POGL has subscribed for 917,168 Preferred Stocks of
RFC based on the issue price of USD10.00 per Preferred Stock, consideration of
which is satisfied by the conversion of the debts. Each preferred share can be
converted into 10 common shares.
If at any time during the 12 months following the subscription of the Preferred
Stock (the "Initial Conversion Period"), RFC's common stock begins trading on a
stock exchange, market, or other trading facility, the issued and outstanding
Preferred Stock will immediately convert, on a 1 share of Preferred Stock for 10
shares of common stock basis. Following the Initial Conversion Period and until
such time as the Preferred Stock has been converted into debt ( "Subsequent
Conversion Period"), if RFC's common stock begins trading on a stock exchange,
market, or other trading facility, the issued and outstanding Preferred Stock
will immediately convert, on a 1 share of Preferred Stock for 10 shares of
common stock basis.
At any time following the Initial Conversion Period, provided that RFC's common
stock is not trading on a stock exchange, market, or other trading facility
resulting in the automatic conversion as described above, POGL shall have the
right, but not the obligation, to convert all of the shares of Preferred Stock
into a debt obligation ("Debt Amount") of RFC (the "Debt Conversion"). If POGL
chooses to take advantage of the Debt Conversion, RFC will pay interest on the
principal amount of the debt at a rate of 8%, payable quarterly in arrears, in
cash or by issuing shares of RFC's common stock at a conversion/purchase rate of
USD1.00 per common share. If POGL chooses to take advantage of the Debt
Conversion, POGL shall have the right to receive from RFC 25% of RFC's Net
Income After Taxes (as defined in RFC's annual audited financial statements)
until the full amount of the Debt Amount has been repaid or until RFC's common
stock begins trading on a stock exchange, market, or other trading facility, at
which time the remaining outstanding Debt Amount shall automatically convert
into shares of RFC's common stock at a conversion price of USD1.00 per common
share.
The risk that RFC may not successfully raise the necessary capital through issue
of new equity or borrowings and the risk that RFC may not have adequate
liquidity to fund their operation raises substantial doubt about RFC's ability
to continue as a going concern. Hence, there is there is a risk that the
investment amount shown above would be impaired. The carrying amount of the
investment included in the account does not include any adjustment if RFC is not
a going concern.
12. Material Events Subsequent to the End of the Year
There are no material events subsequent to the end of the year.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSUFMFSUSESM
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