WE ENGINEER SOLUTIONS FOR TOMORROW 18 th ANNUAL GENERAL MEETING KELINGTON GROUP BERHAD (0151) 13 JUNE 2018
FY2017 KEY HIGHLIGHTS Notable milestones and deliverables BUSINESS PERFORMANCE RECORD HIGH NEW VENTURES WIDER NEW ORDERS • Commenced on-site gas CLIENTELE supply business 374 RM • Established manufacturing beyond electronics sectors million of liquid C02 business FINANCIAL HIGHLIGHTS HIGHEST EVER STRONG HIGHEST EVER DIVIDEND NET CASH NET PROFIT PAYOUT 11.8 31.9 3.7 RM RM RM million million million 2
BETTER BALANCE ACROSS 3 DIVISIONS Revenue breakdown in FY2017 BUSINESS SEGMENTS GEOGRAPHICAL* GC 25% 45% 37% 41% 114.4m 128.8m 313.3 R M MALAYSIA SINGAPORE million UHP 18% 9% 22% PE 68.2m TAIWAN CHINA Higher revenue contribution from Industrial Gases expected in FY2019 UHP - Ultra High Purity PE – Process Engineering GC – General Contracting IG – Industrial Gas 3 *Figure above represents only the key operating markets while the remaining 3% is contributed by other markets.
RECORD BREAKING YEAR : All-time high net profit FOCUS ON GROWING BOTTOMLINE Bidding for higher margin projects, cost optimization efforts (eg. centralized procurement) Gross profit margin 5 ppts 11% 16% FY2016 FY2017 Profit before tax margin HIGHEST EVER NET PROFIT 2 ppts 3% 5% 11.8 FY2016 FY2017 Earnings per share (sen) RM mil 30% 4.0 5.2 FY2016 FY2017
STRONG ORDERBOOK REPLENISHMENT Healthy year-on-year growth 374 323 287 225 FY2014 FY2015 FY2016 FY2017 NEW ORDERS SECURED (RM mil) 267 * RM 750 RM Growing million million orderbook outstanding orderbook tenderbook *As at 1QFY2018 5
NOTABLE PROJECTS IN 2017/2018 Malaysia SYXXXXMER [PE] INXXXEON [UHP] SXXTERRA [UHP] RM 40.0 million RM 8.0 million RM 6.3 million Feb 2017 – Mar 2018 Nov 2017 – May 2018 Jun 2016 – Dec 2016 HXXLETT PACKARD [UHP] WXXTERN DIGITAL [UHP] AYAM DXXDINGS [PE] RM 4.8 million RM 4.8 million RM 6.1 million Feb 2017 – June 2017 On-going Mar 2017 – Sept 2017 6 UHP - Ultra High Purity PE – Process Engineering
NOTABLE PROJECTS IN 2017/2018 Singapore GXXAUDAN [PE] MXXRON [UHP] SGD 8.8 million SGD 6.2 million Apr 2017 – May 2018 Dec 2017 – June 2018 AMS [UHP] SGD 2.7 million Jan 2018 – June 2018 7 UHP - Ultra High Purity PE – Process Engineering
NOTABLE PROJECTS IN 2017/2018 China GF CHEXXDU [UHP] SMXX [UHP] RMB 108.0 million RMB 25.7 million Nov 2017 – Aug 2018 Dec 2017 – July 2018 SMXX [UHP] RMB 22.7 million Oct 2017 – Apr 2018 8 UHP - Ultra High Purity
NOTABLE PROJECTS IN 2017/2018 Taiwan TSXX [PE] NTD 35.0 million Apr 2018 – Oct 2018 9
REWARDING OUR SHAREHOLDERS Highest dividend payout since listing DIVIDEND PAYOUT RATIO (%) 71% 63% 53% 42% 26% 29% 25% 25% n.m 3.7 3.2 3.2 2.4 2.3 2.2 2.2 1.1 1.1 2009 2010 2011 2012 2013 2014 2015 2016 2017 DIVIDEND PAYOUT (RM mil) HIGHEST million 3.7 2% 29% RM DIVIDEND PAYOUT DIVIDEND YIELD^ RATIO PAYOUT *Subject to the approval of shareholders ^Based on share price as at 18 April 2018 @RM0.76 10
VENTURING INTO INDUSTRIAL GASES BUSINESS To drive recurring revenue stream and earnings profitability HIGH PROFIT MARGINS BUSINESS Industrial Gas peers’ average gross profit margins are at ~ 30% -40% On-Site Gas Supply Manufacturing of Liquid C02 ➢ To be 2 nd largest supplier in Malaysia ➢ Completed an on-site gas generator and started our first supply contract in ➢ Signed a 15-year supply agreement Feb 2018. with Petronas to purchase waste C02. ➢ The contract will contribute ~RM20 mil ➢ To build a Liquid C02 plant in Kerteh, revenue for a period of 10 years to the Terengganu and starts operation in Group. 2019. 11
EXAMPLES OF USAGES OF CO2 Manufacture carbonated Food Freezing Manufacture dry ice drinks (used in aviation industry) Enhance Oil Recovery C02 Blast Cleaning Welding for (EOR) to increase yields construction and in oil wells automotive industries 12
EXPANDING OUR CHINA MARKET Capitalize on “China Chip Expansion” China’s semiconductors sector is set for rapid expansion with total investment estimated at USD140 billion under the "Made in China 2025“. ¹ 13 1. https://asia.nikkei.com/Spotlight/Cover-Story/China-s-upstart-chip-companies-aim-to-topple-Samsung-Intel-and-TSMC
POSITIVE OUTLOOK AHEAD Stronger financial performance in FY2018 Completing higher margins projects from UHP and PE division Securing more UHP projects from China. Revenue commencement from on- site industrial gas supply contract. Healthy orderbook replenishment 14
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