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BH GLOBAL MARINE LIMITEDANNUAL REPORT 2012
Dear Shareholders,
FY2012: AN OVERVIEW
The year in general was not very encouraging for
the marine industry as a whole. With the economic
crisis emanating from the Euro Zone and the United
States on a slow path to recovery, global trade and
hence the commercial shipping and shipbuilding
sectors continued to suffer from low charter rates and
oversupply of vessels. In fact, the Baltic Dry Index
collapsed to about 699 points by the end of 2012.
Against this backdrop, we also faced challenges and
uncertainties during FY2012.
For FY2012, overall revenue of the Group declined
11% year-on-year (“y-o-y”) to S$97.7 million (FY2011:
S$110.3 million) due mainly to a 52% reduction in
Engineering Services business segment’s revenue
from S$31.1 million for FY2011 to S$15.0 million
for FY2012. The decrease in revenue was due to
the absence of new significant orders received and
lower revenues recognized from ongoing projects
which were completed in December 2012. As the
ongoing projects from Engineering, Procurement and
Construction Management (“EPCM”) services division
were contracted in US Dollars, the depreciation of the
US Dollar against the Singapore Dollar in FY2012 also
led to lower revenues recognized. As a result, revenue
contribution from Engineering Services Division to the
Group’s total revenue declined from 28% in FY2011
to 15% in FY2012. Revenue from our Supply Chain
Management business segment increased marginally
by 2% to S$63.4 million in FY2012 (FY2011: S$62.0
million) while our Manufacturing Division’s revenue
rose 13% to S$19.3 million in FY2012 (FY2011:
S$17.1 million).
The Group’s gross profit decreased 44% y-o-y from
S$35.1million for FY2011 to S$19.5million for FY2012
and gross profit margin declined 12 percentage
points to 20% for FY2012 as compared to 32% for
FY2011. The lower gross profit margin was a result
of the depreciation of US Dollar against Singapore
Dollar and cost overruns for certain projects from the
Engineering Services business division.
The Group concluded FY2012 with a net loss of
$$35.4 million (FY2011: net profit of S$13.3 million).
This was due to a net loss of S$2.7 million from the
continuing operations due mainly to lower gross
profit margin from Engineering Services Division
and higher administrative expenses incurred by the
Manufacturing Division. The higher administrative
expenses were due to the consolidation of Gulf
Specialty Steel Industries LLC which commenced its
construction of our steel wire factory and resulted in
associated higher manpower cost. The construction
of the steel wire plant is scheduled to be completed
by early 2Q2013.
ALVIN LIM HWEE HONG
Executive Chairman
CHAIRMAN STATEMENT
ONBEHALF OF THE BOARDOF
DIRECTORS, I WOULD LIKE TO
PRESENT TO YOU THE ANNUAL
REPORT OF BHGLOBAL MARINE
LIMITED (“BH GLOBAL”, “明辉环
球海事” OR THE “GROUP”) FOR
THE FINANCIAL YEAR ENDED 31
DECEMBER 2012 (“FY2012”).