AGM Statement

 

TIDMVELO 
 
RNS Number : 3916U 
Velosi Limited 
24 June 2009 
 
 
 
 
 
 
 
 
 
 24 June 2009 
 
 
 
 
Velosi Limited ("Velosi" or "the Group") 
 
 
AGM STATEMENT BY THE CHAIRMAN 
 
 
 
 
John Hogan, Chairman of Velosi, the provider of asset integrity and HSE services 
to a number of major national and multinational oil and gas companies, will make 
the following statement at the Company's Annual General Meeting being held today 
at 11.00am: 
"The Group has begun 2009 positively and is trading in line with expectations 
building on a strong 2008 performance during which we delivered a record set of 
financial results, with turnover increasing by 56% to US$182.1 million and 
profit before tax growing by 30% to US$14.9 million. We made substantial 
operational progress, venturing into new geographic locations, increasing our 
market share in existing markets, and expanding our service offerings. 
 
 
In 2008 revenue growth was driven by our ability to retain or renew all existing 
contracts and by our success in winning new contracts, particularly in the 
Middle East and Africa. We therefore started 2009 from a sound position with a 
high level of the revenues forecast already secured against existing contracts 
and we have since continued to be successful in winning new contracts, again 
particularly in the Middle East and Africa. 
 
 
I am very pleased to announce a substantial new 5 year contract with the South 
African state owned electricity provider Eskom. The contract has been won by 
Velosi Europe in a 50:50 partnership with Khum MK Investments to provide Quality 
and Inspection services for Eskom's new build power plant program. Capital spend 
on this program is expected to be in excess of US$30 billion and the fees for 
inspection should be in the region of 3%. The Quality and Inspection services 
work will be spread out amongst a number of competing inspection authorities and 
much of the work will take place in Europe. Whilst we are confident of winning 
our proportion of the work available, there can be no guarantee of the level of 
fees which Velosi may ultimately achieve over the life of the contract. 
 
 
Eskom provides 95% of South Africa's electricity and has embarked on 
an ambitious new-build program that is expected to run for 17 years. The program 
has commenced with the construction of the Medupi Power Station in the Northern 
Province. It will be the world's 4th largest coal fired station when 
commissioned between 2012 and 2015. Construction of Kusile, the second power 
station, in Mpumalanga is also underway and will be bigger than Medupi once it 
is commissioned in 2017. Eskom is also working on pumped storage schemes and a 
nuclear project to supplement demand. 
 
 
Velosi will provide Quality and Inspection services on equipment and machinery 
from the manufacturing phase until shipment to South Africa. 
 
 
In addition, I am also pleased to announce two further contract wins - with Abu 
Dhabi Gas Industries Ltd; and PPL Shipyard. The Abu Dhabi contract is for five 
years providing worldwide vendor inspection and site construction inspection in 
offshore and onshore sites. The contract commenced on 1 April 2009 and is 
expected to be worth in excess of  US$ 10 million.  Velosi's 65% owned 
subsidiary K2 Specialist Services Pte Ltd ("K2") has been awarded an extension 
to an existing contract with PPL. The extension covers the assembly and 
installation of five further new build jackup derricks in addition to the five 
already being assembled. 
 
 
While the Group is in a strong position and is continuing to grow revenues and 
expand geographically, we recognize we are operating in a more challenging 
market environment and we have adapted the business to reflect this. 
 
 
A key focus is ensuring we maintain a strong cash position. Currently the Group 
has maintained a strong net cash position of approximately US$17 million 
and very low gearing levels of 1%, providing a secure financial platform. In 
addition, we continue to focus on ensuring the business operates on a 
streamlined cost base. In terms of acquisitions we have adopted a more 
conservative approach whilst ensuring we do not forego commercial opportunities. 
 
 
Building on our success in 2008, the current year has started well and as a 
result we are trading in line with market expectations and are confident of 
delivering a good performance for 2009". 
 
 
 
 
-END- 
 
 
 For further information, please contact: 
 
 
+-------------------------+--------------------+-----------------------+ 
| Velosi                  | Dr Nabil Abdul     | 020 7930 0777         | 
|                         | Jalil              |                       | 
|                         | Joe Vincent        |                       | 
+-------------------------+--------------------+-----------------------+ 
| Strand Partners         | James Harris       | 020 7409 3494         | 
+-------------------------+--------------------+-----------------------+ 
| Charles Stanley         | Mark Taylor        | 020 7149 6000         | 
| Securities              | Freddy Crossley    |                       | 
+-------------------------+--------------------+-----------------------+ 
| Cardew Group            | Tim Robertson      | 020 7930 0777         | 
|                         | Catherine Maitland |                       | 
+-------------------------+--------------------+-----------------------+ 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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