TURNOVER ROSE 29.1% TO US$ 78.1 MILLION
GROSS PROFIT INCREASED BY 25.1%
NET PROFIT AMOUNTED TO US$ 2.8 MILLION
(24 August 2011) TSC Group Holdings Limited ("TSC Group" or the "Company", together with its subsidiaries as the "Group") reported a turnover of US$ 78.1 million for the six months ended 30 June 2011 ("Period"), representing an increase of 29.1% from same period last year. The Group's gross profit grew 25.1% to US$ 28.5 million and net profit attributable to equity shareholders amounted to US $2.8 million.
"During the first six months of 2011, oil price sustained consistently above US$100 per barrel (Brent crude oil). Demand of offshore rigs and land rigs were high due to long-term policy to increase oil production by governments, high oil exploration and production capex confirmed by national oil companies as well as a rising rig charter rates for premium rigs. All these factors contributed to a relatively stable market environment for the Group's sales. This is reflected in the 29.1% increase of the Group's turnover for the Period, while gross margin remained at 36%, consistent with the corresponding period of 2010," said Mr. Jiang Bing Hua, the Executive Chairman of TSC Group.
The board of directors of the Company does not recommend the payment of an interim dividend for the six months ended 30 June 2011 (2010: nil).
During the Period, the Group's turnover comprised revenue from capital equipment and packages, oilfield expendables and supplies, and provision of engineering services, which accounted for 70.6%, 15.7% and 13.7%, respectively, of the total turnover.
Revenue from capital equipment and packages during the Period rose by 19.5% to US$ 55.1 million compared to US$ 46.1 million in the same period of 2010.
Building a strong base of core products in oilfield expendables and engineering services were our primary focus in the first half of 2011. As a result, revenue from the oilfield expendables and supplies segment reached US$ 12.2 million during the Period, which represented an increase of 9.9% compared with same period last year.
The revenue for engineering services grew significantly by 231.1% year on year to US$10.8 million, driven by strong demand for quality engineering service by customers in emerging markets.
Looking ahead, Mr. Jiang remarked, "We are cautiously optimistic about the market outlook in the second half of 2011. Global economy becomes uncertain since the recent European debt crisis and downgrade of the US sovereign debt. The overall rig utilization rate was 71% in the first half of 2011, still below the 5-year average of 81%. The Group thus updated its strategy to focus on lower risk, high margin areas of MRO expendable supplies, offshore services, after sales products we have already established a ready market in the oil patch. With this strong base in MRO oilfield expendables and offshore services, TSC Group becomes much more resilient amid oil price fluctuations. The strategy of supplying competitively priced, high quality and longer lifecycle products for expendable replacement and services can also open up room for new market capture and expansion in all our business segments and throughout all phases of the oil price cycle. We will strive to maintain progress and growth in capital equipment and packages segment in the second half of the year. In the long run, TSC Group endeavors to be a cost competitive provider of integrated solutions to the oil and gas drilling industry."