MARCH / APRIL 2009 • VOL 5 • ISSUE 2 MICA (P) 189/10/2008 Hyflux achieves record earnings for FY2008 H yflux achieved record net profits of S$59M on the back of a historic high S$554M revenue for the full year ended 31 December 2008. Dividend per share is 3.43 cents, almost twice the amount in FY2007. Growth continues to be driven by municipal sales from both China and Algeria. Municipal sales accounted for 86% of revenue at S$477M. From a geographical perspective, key growth markets China contributed 54% and Algeria 40% share of the revenue. The return on equity stood at 19% in FY2008, as compared to 13% in FY2007. Hyflux CEO Olivia Lum addressed the 50 reporters, analysts and bankers at its results briefing: “We will continue to focus on superior project execution, quality growth and balance sheet strength. At the same time, we will expand our recurring earning streams including long term Operations & Maintenance (O&M) contracts.” Conversation with CEO: We can make things happen At a recent senior managers’ meeting held in January 2009, Hyflux CEO Olivia Lum set out the new directions for Hyflux amidst the current economic situation. “I believe more than 95% of our staff have the right ingredients to make Hyflux a champion company,” said Lum. “But we need to walk the talk.” Lum noted that the downturn is an opportunity for Hyflux to re-energise and emphasized the importance of listening to the collective voice of the management. She also urged staff to provide good customer service to both internal and external customers and practise the Hyflux values of “Boldness”, “Entrepreneurship”, “Satisfaction” and “Testimony” – values which have made the company what it is today. On the issue of cost-cutting, Lum said that, like other companies, Hyflux will also be managing cashflow prudently in view of the current economic climate. However, she reassured staff that there would not be retrenchment. While she acknowledged that there may be ‘some discomfort’ as the company tightens its belt, she firmly believes that with the right attitude, talents, vision and belief, “we can make things happen.” Also present at the meeting was Group Deputy CEO & CFO Sam Ong. Ong pointed out the need to exercise strong teamwork and put in place good talent to ensure Hyflux’s success. “A company cannot survive with one person,” said Ong, “You cannot do everything all by yourself… You need the right place, right time, and the right people to move the company forward.” Lee Shou Yin Dividend Per Share (S$ Cents/Share) 2003 2004 2005 2006 2007 2008 0.70 1.27 1.35 1.35 1.89 3.43 Increasing EPC & O&M Order Book EPC O&M 436 254 355 863 1,145 166 1500 1000 500 0 S$ Mln DEC 06 DEC 07 DEC 08 Cumulative Average Growth Rate (CAGR) of Revenue and PBT Revenue PBT PBT CAGR 34% (2002–2008) 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008 45 12 81 20 89 29 132 50 142 20 193 39 70 554 S$ Mln Johan Lim S$ Mln 31-Dec-08 31-Dec-07 +/- % Revenue PBT EPS (Cents) 554 193 187% 39 82% 59 33 11.25 6.23 78% 70 PATMI 79% Revenue & Profit Comparison
Transcript
MARCH / APRIL 2009 • VOL 5 • ISSUE 2 MICA (P) 189/10/2008
Hyflux achieves record earnings for FY2008
Hyflux achieved record net profits of S$59M on the back of a historic high S$554M revenue for the full year ended 31 December 2008. Dividend per share is 3.43 cents, almost twice
the amount in FY2007.
Growth continues to be driven by municipal sales from both China and Algeria. Municipal sales accounted for 86% of revenue at S$477M. From a geographical perspective, key growth markets China contributed 54% and Algeria 40% share of the revenue. The return on equity stood at 19% in FY2008, as compared to 13% in FY2007.
Hyflux CEO Olivia Lum addressed the 50 reporters, analysts and bankers at its results briefing: “We will continue to focus on superior project execution, quality growth and balance sheet strength. At the same time, we will expand our recurring earning streams including long term Operations & Maintenance (O&M) contracts.”
Conversation with CEO:
We can make things happenAt a recent senior managers’ meeting held in January 2009, Hyflux CEO Olivia Lum set out the new directions for Hyflux amidst the current economic situation.
“I believe more than 95% of our staff have the right ingredients to make Hyflux a champion company,” said Lum. “But we need to walk the talk.”
Lum noted that the downturn is an opportunity for Hyflux to re-energise and emphasized the importance of listening to the collective voice of the management. She also urged staff to provide good customer service to both internal and external customers and practise the Hyflux values of “Boldness”, “Entrepreneurship”, “Satisfaction” and “Testimony” – values which have made the company what it is today.
On the issue of cost-cutting, Lum said that, like other companies, Hyflux will also be managing cashflow prudently in view of the current economic climate. However, she reassured staff that there would not be retrenchment. While she acknowledged that there may be ‘some discomfort’ as the company tightens its belt, she firmly believes that with the right attitude, talents, vision and belief, “we can make things happen.”
Also present at the meeting was Group Deputy CEO & CFO Sam Ong.
Ong pointed out the need to exercise strong teamwork and put in place good talent to ensure Hyflux’s success. “A company cannot survive with one person,” said Ong, “You cannot do everything all by yourself… You need the right place, right time, and the right people to move the company forward.”
Lee Shou Yin
Dividend Per Share (S$ Cents/Share)
2003 2004 2005 2006 2007 2008
0.70
1.27 1.35 1.35
1.89
3.43
Increasing EPC & O&M Order Book
EPC O&M
436
254
355
8631,145166
1500
1000
500
0
S$ Mln
DEC 06 DEC 07 DEC 08
Cumulative Average Growth Rate (CAGR) of Revenue and PBT
Revenue PBT
PBT CAGR 34% (2002–2008)
600
500
400
300
200
100
02002 2003 2004 2005 2006 2007 2008
4512
81
20
89
29
132
50
142
20
193
39
70
554
S$ Mln
Johan Lim
S$ Mln 31-Dec-08 31-Dec-07 +/- %
Revenue
PBT
EPS (Cents)
554 193 187%
39 82%
59 33
11.25 6.23 78%
70
PATMI 79%
Revenue & Profit Comparison
Hyflux achieves record earnings for FY2008 ... cont’d Hyflux’s O&M contracts with its operational plants, in China and eventually Algeria, are emerging as a robust source of recurring income. These service-based contracts will generate stable and recurring earnings stream of S$335M to be realized over the next 20–30 years. The number of operating plants now stands at 16, up from 11 in FY2007. In addition, Hyflux’s EPC works in China and Algeria, with the order book expanded by 34% to S$1.15B, are progressing on schedule and on budget, and will anchor it with a sustained revenue and meaningful earnings base.
Hyflux currently has a robust pipeline of more than 40
Hyflux top management at the full year FY2008 results briefing (from left): Group EVP & CIO Cho Wee Peng, Group CEO Olivia Lum, Group Deputy CEO & CFO Sam Ong and Group EVP, Capital Markets Winnifred Heap
Group Deputy CEO & CFO Sam Ong delivering the results presentation
A reporter from the Edge interviewing Sam Ong Group EVP & CIO Cho Wee Peng addressing questions from analysts
The Hyflux results briefing was attended by some 50 media, analysts and bankers,Hyflux Board of Directors and Senior Management
An analyst in the audience posing a question during the Q&A session
plants covering wastewater treatment and water recycling across China, located in the Jiangsu, Tianjin, Hebei and Shandong provinces. In the MENA region, Hyflux is also building a membrane-based seawater desalination plant (200,000m3/day) in Tlemcen and is the EPC contractor for the world’s largest reverse osmosis seawater desalination plant with a design capacity of 500,000m3/day in Magtaa.
Going forward, Hyflux will continue to adopt a disciplined and prudent approach to its business management and investments, while continuing to build on its execution and process strengths.
Olivia Lum receives “A Deed of Gift” from The NetherlandsOn 29 January, Hyflux CEO Olivia Lum was presented with an award “Space to Take Place” by the Ambassador of the Kingdom of the Netherlands. This award was specially designed for the 1,000 most valued contacts of Dutch ambassadors and consuls-general across the world.
The uniqueness of the award stems from the fact that it is a work of art in the form of a 100-meter bench, situated on the waterfront of Ijburg, in a historic part of Amsterdam. It is created by Amsterdam-based design agency, Droog, and designer Claudia Linders, after Linders’ work was selected through intense competition. The unveiling of the bench took place on 6 October 2008 in the presence of the Mayor of Amsterdam and the State Secretary for European Affairs, but the recipients of the award were only determined by the Dutch Ministry of Foreign Affairs last month.
Hyflux Water Trust exceeds distribution forecasts for fiscal year 2008Further underscoring the strong fundamentals of its business model, Hyflux Water Trust (“HWT”) has exceeded the distribution forecasts for the full year despite the current challenging market conditions.
For its full year ended 31 December 2008, HWT posted net profit of S$10.3M, which is much higher than the forecast profit of S$0.8M, from a revenue of S$54.0M. Distribution Per Unit (“DPU”) is 4.96 cents, which is 2% higher than the full year forecast of 4.88 cents.
The first pure-play global water business trust to be listed in Asia, HWT’s strategy is to pursue yield accretive acquisitions to achieve long-term, regular and predictable distributions for investors. With its recent acquisition of the four ROFOAR plants, HWT’s portfolio now comprises 17 water plants in the PRC operating under long-term concession agreements. Total design capacity has also increased by 112% or 275,000m3/day to 520,000m3/day since Initial Public Offer in December 2007. Currently, 12 of the 13 plants in the Initial Portfolio are operational.
Catherine Hu
Johan Lim
Each recipient of the award is dedicated the ownership of a portion of the artwork, in other words, a portion of the physical space in the Netherlands. This exclusive gift is an artistic object and a public good, a symbol of hospitality and shared identity.
Work of art in the form of a 100-meter bench by Amsterdam-based design agency, Droog and designer Claudia Linders
The Mayor of Liaoyang People’s Government, Tang Zhiguo, met with Hyflux’s top executives on 13 February. Mayor Tang shared that Liaoyang City enjoyed a growth rate of 16% last year and has not been affected by the economic crisis. Mayor Tang holds an optimistic outlook for Liaoyang’s growth in 2009. He quoted Liaoning Province Governor Mr Chen Zhenggao, who said that “Liaoning will be the driving force for China in 2009.”
Mayor Tang also visited the SingSpring Desalination Plant during his trip to Singapore. Mayor Tang hopes to see more project collaborations between Hyflux and the Liaoyang City.
In a separate visit, Ningxia Power CEO Li Guanglin and Hypow CEO Dai Hongyi toured the SingSpring Desalination Plant together on 4 February. Li was impressed by the efficiency of the desalination plant and the environmental considerations that went into designing, building, operating and maintaining the plant.
Living out the entrepreneurial spirit at Hyflux Johan Lim
Hyflux SVP Freddy Soon (middle) with the students in a group photo
As part of their exchange program and learning journey, 20 NUS and Peking University students visited Hyflux on 11 February to learn more about entrepreneurship. They were hosted by Hyflux Senior Vice President Freddy Soon who shared the story of Hyflux and founder Olivia Lum.
Team leader and program director for NUS Entrepreneurship Society, Chong Chung Huey, probably best sums up the students’ thoughts: “It was definitely a meaningful trip to
Hyflux. The sharing session was very interactive and it really provoked us to think deeper into what it takes to be an entrepreneur: knowledge, passion and perseverance. We are extremely inspired by the life story of the CEO and founder of Hyflux, Ms Lum and her story has become a motivation to us in our pursuit of success. Thank you Hyflux!”
Mayor Tang Zhiguo (seated in centre) was accompanied by Mayor of Dengta, Liaoyang, Sui Xianli (1st from left), District Leader of Baita, Liaoyang, Cao Xian and 3 other delegates at the Hyflux Head Office
Ningxia Power CEO Li Guanglin (5th from the left) was hosted by Hyflux General Manager Michael Siew (4th from left) and Hyflux Managing Director, Head of China Industrial Projects, Ge Wenyue (6th from left) at the SingSpring Desalination Plant
Hyflux staff celebrates Lunar New Year of the Ox On 21 January, Hyflux’s local and overseas staff gathered at its Singapore headquarters for a pre-lunar New Year celebration full of food, entertainment, games and fun. We revisit the joyous occasion with some memorable event photos captured below:
