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transcript
CTCI Investment Relation
CTCI Corporation 2015 2nd Investor Conference
September 30, 2015
The Most Reliable Global Engineering Service Provider
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CTCI CORPORATION
2015 Q1~Q3 Operation Review and
Business Outlook
• 2015 Q1~Q3 Operation Review
• Business Outlook
• 2016 Potential Oppurtunities
New Contracts and Financial
Highlights –2015 1st Half
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CTCI CORPORATION
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2006/1/2 2007/1/2 2008/1/2 2009/1/2 2010/1/2 2011/1/2 2012/1/2 2013/1/2 2014/1/2 2015/1/2
Demand Supply
Sep.19 2015 Brent:$48 WTI:$45
2015 Q1~Q3 Operation Review
The Oil War
• To compete against US shale oil industry, the OPEC lowers the oil price while maintaining the volume of oil production. Following the removal of Iran oil export sanction, the problem of global oil oversupply will get worse.
• Negative impacts: deteriorating fiscal situations of oil producing countries, decline in profits or deficits for oil companies, a falling oil price lower than the cost for shale oil drilling, bankruptcies for shale oil companies, etc.
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CTCI CORPORATION
2015 Q1~Q3 Operation Review
Maximizing Current Business through Horizontal and Vertical Expansion
• In-depth development in local markets, including that of power plants and MRT projects
• Cooperation with clients involved in the field of new business, such as green energy, waste reduction
• Strengthen Front-End Engineering Design (FEED) ability to pursue Feed+EPs tenders for persuading clients into EPC L/S in good timing for business opportunities
• Expand downward to maintenance business for existing EPC projects
Expand Products, Markets and Technologies
• New Products: such as Gas Field, LNG export terminals, HSBC and C4,C5 derivatives
• New Markets: seek to form alliances with local EPC companies and leverage the resources of oversea subsidiaries to expand the new markets, such as Indonesia, Malaysia, Myanmar, the USA and Latin America , etc.
• New Technologies: to acquire upstream products and technologies such as ethylene cracker, cryogenic tank, high pressure system and MRT signal system through merger and acquisition, or strategic alliance
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CTCI CORPORATION
2015 Q1~Q3 Operation Review
Business
Hydrocarbon Business Operations
• Refinery : Awarded Talin Plant #3 RDS & #8 SRU EPC Project from CPC Corporation; refinery project cooperated with an US company qualified by an oil company in the Middle East.
• Petrochemical : Awarded 2 basic design projects for petrochemical plant of Formosa Group in the USA. Bidding 2 mega petrochemical plants in Malaysia and Omen respectively, the results are expected to be announced by the end of 2015.
Infrastructure ,Enviroment and Power Business Operations
• Power Plants: Bidding air pollution control project of domestic power plant , EPC project of Vietnam power plant, the results are expected to be announced by the end of 2015. Evaluating the Malaysia power plant projects.
• Infrastructure: Awarded the third MRT trackwork project in Singapore. CTCI has the highest market share for undergoing trackworks projects in Singapore. Bidding MRT and other transportation projects in Taiwan, South East Asia and India.
• Others: Awarded Ti-Sponge Plant EPC project in Saudi Arabia by joint venture with Chiyoda Corp.
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CTCI CORPORATION
2015 Q1~Q3 Operation Review
Company Honors
• The first and only Taiwan EPC company selected for Dow Jones Sustainability Index – Emerging Markets.
• Top 50 for Excellence in Corporate Social Responsibilities” by CommonWealth Magazine
• Evaluated as Top 5% in the 2014 Corporate Governance Evaluation System by Taiwan Stock Exchange Corporation
Overseas M&A and Investment
• Invested an engineering company in Malaysia by acquiring 49% shares so as to better develop ASEAN markets and strengthen CTCI’s overseas competitiveness.
ENR Rankings
• To develop international market with commendable results , with the international rankings improved . Ranking 2014 2015
International Contractor 131 122
Global Contractor 160 149
International Design Firms 114 103
Global Desing Firms 144 136
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CTCI CORPORATION
Business Outlook
Enormous Construction Opportunities from “One Belt , One Road” Initiative
“Silk Road Economic Belt” and “New Sea-Route Silk Road”; China’s strategic transformation to the New Normal
• Alliance with overseas complementary strategic partners for strengthening marketing and project execution ability. Several MOUs have been signed.
• The projects will be mainly about infrastructures. Several power plant and steel plant projects are now being evaluated.
Russia High Speed Rail
Kazakhstan Coal-fired power plant
India Railway
Indonesia Steel Plant, Coal-fired power plant
Pakistan Railway projects, highway Coal-fired power plants, solar power, wind power
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CTCI CORPORATION
Business Outlook
Business Development : USA
Benefited from the rise of shale gas, investment opportunities of downstream petrochemical plants are increasing
• Investment incentives: The cost of using US shale gas as feedstock to produce ethylene is lower than using naphtha in Asia
• Potential opportunities of ethylene glycol (EG), ethylene oxide (EO) and low density polyethylene (LDPE), etc
• To strengthen the local market competitive advantages and engineering execution capability through M&A, alliances and other strategic partnerships
Business Development : India
The new India government promotes the concept of “Made in India”
• To participate in early investment work by serving as a consultant role for other Taiwanese companies
• CTCI has the language advantage for communication, years of operation experiences and local engineering track records
• Business opportunities from Taiwanese companies: steel plant expansion project, new construction projects from hi-tech industry and traditional industry
• Actively seek LNG projects by using the track record of Kochi LNG receiving terminal projects.
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CTCI CORPORATION
Business Outlook
Business Development : Middle East
Bidding opportunities from Iran and six Gulf countries
• Potential projects in Saudi Arabia area are gradually initiated, such as mega EPC projects of oil companies in Saudi Arabia. CTCI has successfully passed prequalification of several projects and will soon receive invitation to bid.
• There is a high demand for expansion of refinery and petrochemical plants in Iran. CTCI has been paying attention to related business opportunities and will choose to enter the market at an appropriate time.
• Bidding opportunities are abound in the fields of steel, nonferrous, power desalination, air pollution control, and MRT Systems, etc., while the competition is still intensive. The Company will continuously bid the appropriate projects actively.
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CTCI CORPORATION
Taiwan Hydrocarbon:NT$50.0bn Non-Hydrocarbon:N$T43.4bn
South East Asia Hydrocarbon:NT$83.9bn Non-Hydrocarbon:NT$57.0bn
Middle East Hydrocarbon:NT$192.0bn Non-Hydrocarbon:NT$51.0bn
2016 Potential Oppurtunities
Potential Oppurtunities
Total Amount Hydrocarbon Hydrocarbon:NT$389.4bn Non-Hydrocarbon:NT$181.2bn
China Hydrocarbon:NT$21.0bn Non-Hydrocarbon:NT$3.8bn
America and Others Hydrocarbon:NT$22.0bn
India Hydrocarbon:NT$20.5bn Non-Hydrocarbon:NT$26.0bn
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CTCI CORPORATION
2015 Q1~Q3 Operation Review and
Business Outlook
New Contracts and Financial
Highlights–2015 1st Half
• New Projects Awarded in 2015
• Consolidated Sales Revenues,New Contracts and Backlog
• Financial Stataments – 2015 1st Half
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CTCI CORPORATION
New Domestic Projects in 2015
Project Talin Plant #3 RDS & #8 SRU Project
Client CPC Corporation
Contractor CTCI Corporation
Capacity RDS 40,000 (barrels/day, BPSD)
SRU 250 (tons/day, TPD)
Service Scope EPC
Location Taiwan
Kaohsiung,Taiwan
• Rich high-pressure hydrogen engineering
design and plant expansion experiences in
domestic and overseas markets.
• Won several public works quality awards.
• Capacity of RDS increased from 30,000 to
40,000 BPSD.ccvc ; Capacity of SUR
increased from 200 to 250 TPD.
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CTCI CORPORATION
New Overseas Projects in 2015
Project Low density polyethylene (LDPE) project
Client FPC-USA
Contractor CTCI Corporation
Capacity 400 KTA(Kiloton Annually)
Service Scope Basic Design
Location USA
• Breakthrough in the high-pressure
LDPE technology
• Successfully defeat the international
peers, and enter the US market.
• Significantly beneficial for acquiring
potential construction project in the
US market
Texas,USA
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CTCI CORPORATION
New Overseas Projects in 2015
Project Ethylene glycol (EG) plant expansion project
Client Nan Ya Plastics USA
Contractor CTCI Corporation
Capacity 830 KTA(Kiloton Annually)
Service Scope Basic Design
Location USA
• Successfully defeats the international
peers, and enters the US market
• Significantly beneficial for acquiring
potential construction project in the
US market. Texas,USA
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CTCI CORPORATION
Project YNP Ti-sponge EPC Project
Client Toho Titanium/Advanced Metal
Industries Cluster Joint Venture
Contractor CTCI Corporation/Chiyoda Corporation
Joint Venture
Capacity 15.6 KTA(Kiloton Annually)
Service Scope EPC
Location Saudi Arabia
New Overseas Projects in 2015
Yanbu,Saudi Arabia
• After undertaking the cold mill steel
plant project of CSC in India, CTCI was
awarded the YNP Ti-Sponge Project,
marking a milestone for entering
overseas steel and non-ferrous plant
fields.
Titanium plant
Titanium tetrachloride
Plant
Titanium dioxide plant
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CTCI CORPORATION
New Overseas Projects in 2015
Project Gali Batu depot trackword project
Client Land Transport Authority ,Singapore
Contractor CTCI Corporation
Length 5.6 kilometer
Service Scope EPC
Location Singapore
• After undertaking the Downtown Line and
Thomson Line trackwork projects in 2011
and 2014 respectively, CTCI was awarded
the Gali Batu Depot trackwork project
• The contractor having the highest market
share of all undergoing trackwork projects
in Singapore
Singapore
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CTCI CORPORATION
Consolidated Sales Revenues and Breakdown
56.3
60.5
52.2
57.7
40.8
0
10
20
30
40
50
60
70
2011 2012 2013 2014 2015.8
Unit:NT$,Billion
Taiwan 58%
Middle East 18%
Thailand 8%
Malaysia 6%
China 5%
Singapore 3% Other 2%
Power 41%
Petrochemical 19%
Refinery 18%
Infrastructure 7%
Incineration 7%
Other 6%
Hi-Tech 2%
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CTCI CORPORATION
New Contracts and Breakdown
79.5
60.2
66.9
77.9
18.0
0
10
20
30
40
50
60
70
80
90
2011 2012 2013 2014 2015.8
Unit:NT$,Billion
Taiwan 36%
Middle East 23%
Malaysia 22%
China 11%
USA 4%
Singapore 3% Others 1%
Refinery 37%
Steel and Non Ferrous Metals
21%
Hi-Tech 11% Petrochemical
8%
Infrastructure 7%
Other 6%
Operating & Maintenance
5% Enviroment 3%
Power 2%
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CTCI CORPORATION
Backlog and Breakdown
154.6 153.2
163.5
187.1
166.8
100
110
120
130
140
150
160
170
180
190
200
2011 2012 2013 2014 2015.8
Unit:NT$,Billion
Taiwan 56%
Malaysia 24%
Middle East 12%
Singapore 4%
China 2% Other 2%
Refinery 30%
Power 27%
Petrochemical 14%
Incineration 13%
Infrastructure 8%
Other 6%
Steel and Non Ferrous Metals
2%
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CTCI CORPORATION
2015/06/30 2014/06/30 YOY
Sales Revenues 29,863,584 100.0% 26,009,604 100.0% 14.8%
Operating costs (27,454,289) -91.9% (23,982,411) -92.2% 14.5%
Gross Profit 2,409,295 8.1% 2,027,193 7.8% 18.8%
Operating expenses (766,764) -2.6% (735,734) -2.8% 4.2%
Operating income 1,642,531 5.5% 1,291,459 5.0% 27.2%
Total non-operating income and expenses
(91,803) -0.3% 26,959 0.1% -440.5%
Profit before income tax 1,550,728 5.2% 1,318,418 5.1% 17.6%
Income tax expense (322,580) -1.1% (253,578) -1.0% 27.2%
Profit for the period 1,228,148 4.1% 1,064,840 4.1% 15.3%
Profit attributable to Owners of the parent
988,647 3.3% 867,240 3.3% 14.0%
Total basic earnings per share
1.31 1.16 12.9%
2015 1st Half Consolidated Income Statement
Unit:NT$,Thousand
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CTCI CORPORATION
2015/06/30 2014/06/30 2015/06/30 2014/06/30
Current assets* 41,876,995 41,045,347 Current liabilities 31,980,460 31,078,705
Financial assets 1,276,439 2,294,123 Non-current liabilities
6,157,411 6,667,217
Non-current assets 14,839,696 14,498,447 Long-term borrowings
2,769,150 3,083,550
Property, plant and equipment
6,933,450 6,967,687 Other non-current liabilities
3,388,261 3,583,667
Intangible assets 121,772 115,030 Total Liabilities 38,137,871 37,745,922
Other non-current assets
7,784,474 7,415,730 Total equity 18,578,820 17,797,782
Total assets 56,716,691 55,543,794 Total liabilities and equity
56,716,691 55,543,794
*Cash and cash equivalents:NT$9.3bn
2015 1st Half Consolidated Balance Sheet
Unit:NT$,Thousand