HIAP SENG ENGINEERING LTD 1HFY2010 Results Presentation November 12, 2009

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Arleen Goodman
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1 1HFY2010 Results Presentation November 12, 2009

2 Content About Hiap Seng Our Core Business Competitive Strengths Financial Performance Corporate Development Outlook and Future Plans 2

3 About Us Corporate History Established in 1951; Corporatised in 1971; Listed in Singapore Stock Exchange in

4 About Us Hiap Seng Today Today Hiap Seng Engineering is a Specialist Integrated Engineering Group for the Oiland Gas, Petrochemical and Pharmaceutical Industries. We are one of Singapore s leading engineering groups providing engineering services covering engineering, procurement & construction (EPC) projects and plant maintenance services for the oil and gas, petrochemical, and pharmaceutical industries in Singapore and beyond. 4

5 Core Business Hiap Seng Engineering Ltd Plant Maintenance EPC Construction 5

6 Industries Served 6

7 Our Regional Offices With Manufacturing Facilities: Malaysia Thailand Representatives Offices: Indonesia China Hong Kong Taiwan Myanmar Vietnam Bangladesh Australia UAE 7

8 Shell Eastern Petroleum CNOOC CNPC Chiyoda Corp Exxon Mobil TECNIP Chevron Chemicals JGC Corp Foster Wheeler Halliburton Woodside Energy Frontline / Sea Production LINDE Gas MOGE Shengli Shell (China) EMAS Valued Clientele Sumitomo Corp Sinopec China Petronas Malaysia KBR ABB Lumus Emerson Process Systems Glaxo Smith Kline Neste Oil Teijin Polycarbonate JVPC Petronas Prosafe Saipem UOP Shaw Stone & Webster BW Offshore 8

9 Our Facilities 6 yards in Singapore, Malaysia and Thailand; Over 3,000,000 sq ft; 19 & 21 Tuas Crescent fabrication shop has water front & slipway. 19 TUAS CRESCENT 28 TUAS CRESCENT BENOI PLACE THAILAND 9

10 Process Licensors Strategic Alliances Alliance partner with CNOOC Engineering for projects in Gas Compression, Gas reinjection and Gas Booster system and FPSO topsides Alliance with CPE EW (subsidary of CNPC) in relation to LNG and process equipment such as Compression etc. OEM Partnership & Associates Cooper Reciprocating Compressor OEM Fuller Vane Compressor OEM Vilter Screw Compressor OEM Waukesha Gas Engines OEM Caterpillar Gas and Diesel Engines OEM Air Cooled Exchangers Inc. BETA Machinery Allen Bradley Controls 10

11 Accreditation ISO 9001 Quality Management System SCC 2000 Safety Health and Environment (SHE) Management System U stamp and S stamp for manufacture of Pressure Vessels and Boilers by American Society of Mechanical Engineers Manufacture license of Special Equipment by the People s Republic of China 11

12 Our Core Business 12

13 Construction Overview Construction of oil & gas related plants in Singapore, Malaysia, Hongkong, China, Thailand, Bintulu and the Middle East; Completed six Pharmaceutical plants in Singapore; Oil and Chemical Terminal Projects for Oil tanking, Banyan Terminal and Vopak; EPC for FPSO Topsides Australia/Norway/Thailand. 13

14 Plant Maintenance Overview Contributes about 25% of the total revenue in the past years; Revenue from this sector is expected to increase due to the increase of investment of many new O&G related plants; Contributes a steady recurring income; In house contractor for Shell, SRC and Exxon Mobil for the last 30 years. 14

Current Maintenance Activities Plant Maintenance SINGAPORE REFINING COMPANY (SRC) TC TPM OF 50% OF COMPLEX SHELL EASTERN PETROLEUM TC MECH. MAINT.

15 Current Maintenance Activities Plant Maintenance SINGAPORE REFINING COMPANY (SRC) TC TPM OF 50% OF COMPLEX SHELL EASTERN PETROLEUM TC MECH. MAINT. ( 50%) SEMBCORP UTILITIES (SCU) TC TPM OF COMPLEX LINDE SYNGAS TC TPM OF COMPLEX MERCK SHARP DHOME TC MECH. MAINTENANCE DENKA SINGAPORE TC TPM OF COMPLEX EXXONMOBIL REFINERY (PIONEER) TC TANK MAINTENANCE EXXONMOBIL REFINERY (JURONG ISLAND) TC MISC MECH. WORK CRODA SINGAPORE MISC MECH. WORK SERAYA POWER TEIJIN POLYCARBONATE (CHIYODA) MISC MECH. WORK MISC MECH. WORK 15

16 Engineering Overview Comprises of Hiap Seng Engineering that majors in Plant and Skids Engineering and Hiap Seng Compression that specialises in Compression modules inclusive of Process and FPSO Topsides; Consists a team of 100 professionals and specialist in respective field; Prepares FEED studies; Produces P&ID and detail design; Prepares MTO & specification for procurement; Specialises in Modular design; Basic and detail design of storage tank and pressure vessel. 16

Compression modules and Plant Engineering.

17 Engineering Core Strength Our Engineering Department comprises a team of multidisciplined Engineers and Draftsman, each with extensive experience on Compression modules and Plant Engineering. Our Design Engineers can build to customer s specifications or tap from standard package designs to meet each unique project application 17

18 Competitive Strengths 18

19 Competitive Strengths Established Track Record Strong Customer Base Strategically Located Facilities Experienced Workforce Over 2,500 well trained & skilled employees 19

20 Competitive Strengths Integrated Services One Stop Shop for Engineering, Procurement & Construction (EPC) & Plant Maintenance Services Design team of over 100 professionals Quality Focused Operations Operations covered under ISO 9001 ASME U & S Stamp & R Stamp certified Strong Team Experienced Management Team, led by CEO and ED with more than 40 years experience & key managers with more than 25 years of experience Solutions Provider Through HSCP, we can offer Gas Compressor, Gas Plant & Process Modules including Topsides/FPSO Access & experience working with OEM/ proprietary vendors 20

21 Financial Highlights 21

22 Financial Highlights S$ mil 2QFY10 2QFY09 % Change 1HFY10 1HFY09 %Change Revenue Gross Profit Gross Profit Margin (%) ppt ppt Net Profit Earnings Per Share (cents) Interim Dividend Declares interim cash dividend of 1.0 cent per ordinary share (one tier tax exempt) expected to be paid on January 18, 2010 Strong balance sheet with net cash position of S$18.7 million 22

projects in 1HFY2010 and savings from continued efforts in cost controls and

23 Revenue 24.4% increase in revenue to S$126.6 million mainly due to a higher percentage of completion in a number of projects in 1HFY2010 and savings from continued efforts in cost controls and improved productivity Financial year ending March 31 Strong order book of approximately S$199 million as at November 11,

24 Revenue By Business Segment Plant Construction & Maintenance Compression & Process Equipment Fabrication 24

25 Revenue By Geographical Segment Singapore Malaysia 25

26 Net Profit 1HFY2010 Net Profit surpasses FY2007 bottomline Financial year ending March 31 26

27 Corporate Developments 27

28 Corporate Development We were awarded two three year maintenance contracts by Shell Eastern Petroleum (Pte) Ltd Contracts are for the provision of the following services on Pulau Bukom, Singapore on a unit rate basis: (1) Bukom intergrated tanks maintenance services; and (2) Bukom mechanical maintenance services. The three year contracts, with an option to extend for another two years, take effect from 1 October

29 Outlook & Future Plans 29

30 30 HIAP SENG ENGINEERING LTD Outlook/Major On going Projects Description Owner Client Start End Value Mechanical & piping Works Neste Oil Neste Oil Mar 09 May 10 S$63.4m Piping Fabrication & Erection Shell EP ABB Toyo Oct 07 Jan 10 S$ 80.0m Piping Fabrication & Erection Shell EP Foster Wheeler Dec 06 Dec 09 S$ 25.0m Mechanical & Piping Works Shell EP Worley Panson Feb 09 Jan 10 S$9.1m Piping, Structure & Equipment Works Shell EP Shell EP Dec 09 Jun 10 S$8.0m EPC of Compressor Package CPEC CPEC Jul 09 Jun 10 US$8.1m EPC of Compressor Package CNPC CNPC Jul 09 Mar 10 US$5m

31 Future Plans Outlook In view of the recovery of oil prices, there is an improved outlook for the oiland gas, petrochemical and pharmaceutical industries in which Hiap Seng operates. Future Plans Concentrate on Oil & Gas, contract FPSO, Process Equipment, Biofuel and in the area of LNG for future growth; Expand our presence overseas; Continue efforts to control costs and improve productivity and explore new business opportunities to enhance shareholder value. 31

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