FY2007 Results Presentation Our Business Structural Steelworks Specialist Civil Engineering Yongnam is A well-established structural steel contractor and specialist engineering solutions provider One of the largest steel fabrication facilities in South East Asia nearest competitor is one-fifth the size of Yongnam S1 category accreditation from Structural Steel Society ISO9000 Quality Management System Certified OHSAS 18001 Occupational Health and Safety Management System Certified 1
Structural Steelworks Competitive strengths: Size of Fabrication Facilities Delivery on time and with quality Few Competitors for S1 Classification Track Record: Second International Airport, Bangkok Expo MRT Station, Fusionpolis, National Library, One Raffles Quay, Changi Airport Terminal 3, Suntec City, Aircraft Hanger, Brunei Circle Line, Dubai Metro Rail, Dubai Formula One recreation cum commercial complex, Orchard Turn, Structural Steelworks Marina Bay Sands Integrated Resort, Formula One recreation cum commercial complex, Dubai Metro Rail, Dubai Orchard Turn, 2
Structural Steelworks Second International Airport, Bangkok National Library, Expo MRT Station, One Raffles Quay, Fusionpolis, Structural Steelworks Competitors: TTJ Design & Engineering Pte Ltd MCC Group Victor Buyck Steel Construction Sdn Bhd JFE Corporate Co. Ltd Alfasi Construction (S) Pte Ltd 3
Specialist Civil Engineering Competitive strengths: Modular Strutting System Meets increasingly stringent design and project requirements Size of Strutting Assets Approximately 70k Tons Low Cost Buy-back Option of Strutting Assets Approximately 8k Tons High Replacement Cost of Struts Track Record: Kallang Paya Lebar Expressway, MRT Circle Line, Hong Kong MRT, Hong Kong Central Expressway, North-East MRT Line, Specialist Civil Engineering HarbourFront Station, North-East Line, Kallang Paya Lebar Expressway, Bartley Station, Circle Line, 4
Specialist Civil Engineering Competitors: Fuchi Company J Steel Facilities : Total Land Area: Approximately 76,000 m 2 Workshop Covered Area: 20,250 m 2 Capacity (Normal Steel Structure): 3,000 Tons per month Average Utilisation: 2,800 Tons per month Malaysia (Pontian): Total Land Area: Approximately 8070 m 2 Workshop Covered Area: 3,000 m 2 Capacity (Normal Steel Structure): 500 Tons per month Average Utilisation: 400 Tons per month Malaysia (Nusajaya, Johor)*: Total Land Area: Approximately 109,103 m 2 Workshop Covered Area: 28,900 m 2 Expected Capacity (Normal Steel Structure): 3,500 Tons per month *New fabrication factory scheduled to commence operation by 1HFY2008 Combined Total Staff Strength: Approximately 1,200 (excluding sub-contractors) 5
Our Business Over 30 years of experience in steel fabrication Long established relationships with major customers, who are reputable contractors, like: Takenaka Corporation Taisei Corporation Obayashi Corporation Penta Ocean Shimizu Corporation Dragages Woh Hup Samsung Corporation Ssangyong Engineering & Construction Co Ltd Hyundai Engineering & Construction Ltd Aker Kvaerner Sembawang Engineering & Construction Ltd Regional Offices Middle East Middle East China Hong Kong Thailand Malaysia - Yongnam Engineering & Construction (Pte) Ltd - YNE Project Engineering (Pte) Ltd Malaysia - Yongnam Engineering Sdn Bhd - Jiwa Harmoni Offshore Sdn Bhd Hong Kong - Yongnam Engineering (Hong Kong) Ltd Thailand Yongnam Engineering & Construction (Thailand) Ltd China - Yongnam Steel Work System Engineering (Shanghai) Co., Ltd Middle East - Yongnam Engineering & Construction (Pte) Ltd, Dubai Branch 6
Regional Projects Norway Korea Pakistan China Japan Middle East India Hong Kong Thailand Philippines Malaysia Brunei Projects undertaken across the region: Malaysia Middle East China Norway Brunei Philippines Thailand Japan Korea Hong Kong Pakistan India Corporate Developments 7
Corporate Developments - FY2006 FY2006 New Projects: Sitronic Wafer Fab building 3 units of High Efficiency Jack-up Derrick Fabrication Alexandra Pedestrian Bridge and Link-way from Kent Ridge to Mount Faber S$13 million worth of specialist civil engineering projects in Dubai On-going projects: Fusionpolis Vivocity Tanjung Bin Power Plant MRT Circle Line Kallang-Paya Lebar Expressway Springleaf Tower: Successful legal suit against UOB. Appeal by UOB in 2007 was subsequently dismissed. Corporate Developments FY2007 FY2007 New Projects: S$90 million structural steelworks contracts in, for Marina Bay Sands Integrated Resort, Formula 1 Grand Prix recreation cum commercial complex, and Orchard Turn shopping mall and multistorey car park Additional S$60 million contracts in Dubai Ongoing projects include: MRT Circle Line Kallang Paya Lebar Expressway Fusionpolis Derrick Fabrication Dubai Metro Rail Share placements and rights issue: January 2007: Placement of 123 million new shares May 2007: Placement of 120 million new shares December 2007: S$100 million syndicated loan in conjunction with Rights issue of 365 million Warrants 8
FY2007 Financial Performance Financial Highlights FY2007 Highlights: Operational net profit jumps 125.5% to S$12.0 million Improved margin from Group s high-growth Structural Steelworks Exceptional gain of S$12.8 million from write-back of impairment provision on an investment property Strengthened balance sheet with two successful share placements, rights issue and exercise of warrants Increase in Group s paid-up share capital to S$92.5 million as at end 2007 Significant reduction in the Group s gearing from 10.6 times to 0.7 times Financial Year ended December 31 9
Financial Highlights FY2007 FY2006 Change (%) Revenue (S$ m) 174.6 150.4 +16.1 Gross Profit (S$ m) 30.9 22.5 +37.1 Gross Profit Margin (%) 17.7 15.0 +18.0 Net Profit after MI (S$ m) 24.8 5.3 +364.9 Net Profit after MI (S$ m) (excluding exceptional gain) 12.0 5.3 +125.5 EPS (Basic)(cents) 2.19 0.72 +204.2 Financial Year ended December 31 Balance Sheet Highlights Work-in-progress (S$ m) Debtors (S$ m) Cash & Bank Balances (S$ m) Bank Borrowings (S$ m) Shareholders Funds (S$ m) Order Book (S$ m) 2007 Dec 31 112.3 19.8 21.7 90.7 108.6 162.0 2006 Dec 31 69.1 7.9 1.4 78.9 7.4 147.0 Financial Year ended December 31 10
Revenue Revenue CAGR from FY03 to FY07 at 27.9% S$ million 200 CAGR: 27.9% 150 81.4 100 65.3 63.6 150.4 174.6 FY2007 Revenue Y-O-Y up 16.1%: Structural Steelworks almost doubled in revenue to S$123.1 million Mainly due to: Completion of projects such as Alexandra Bridge and Sitronic Wafer Plant Commencement of new projects such as Orchard Turn and the Dubai Metro Rail 50 0 FY2003 FY2004 FY2005 FY2006 FY2007 Specialist Civil Engineering declined 25.7% to S$51.5 million Mainly due to: Lower level of activities in the Circle Line projects, as Group has completed and recognised the bulk of high-value work in FY2006 Revenue from Mechanical Engineering was negligible in FY2007 Financial Year ended December 31 Revenue by Business Activity FY2007 Specialist Civil Engineering S$51.5m 29.5% Mechanical Engineering S$18.1m 12.1% FY2006 70.5% Structural Steelworks S$123.1m 46.0% Specialist Civil Engineering S$69.3m 41.9% Structural Steelworks S$63.0m Financial Year ended December 31 11
Revenue by Geographical Segmentation FY2007 Dubai S$65.7m 37.6% Others S$0.2m 0.1% Dubai S$4.4m 2.9% Malaysia S$17.1m 11.4% FY2006 Others S$3.4m 2.2% 62.3% S$108.7m 83.5% S$125.6m Financial Year ended December 31 Gross Profit S$ million Gross Profit CAGR from FY03 30.9 40 to FY07 at 66.7% 22.5 30 FY2007 Gross Profit Y-O-Y up 15.5 15.7 37.1%, due to: 20 10 0 4.0 CAGR: 66.7% FY2003 FY2004 FY2005 FY2006 FY2007 Higher revenue recorded at S$174.6 million Improved gross margins: 15.0% in FY2006 to 17.7% in FY2007 Financial Year ended December 31 12
Operational Net Profit S$ million 15 4-yr CAGR: 188.5% 12.0 10 5.3 5 0.5 0.2 0-5 -10-14.0-15 FY2003 FY2004 FY2005 FY2006 FY2007 Operational Net Profit CAGR from FY04 to FY07 at 188.5% Operational Net Profit Y-O-Y jumps 125.5%, mainly due to: Higher margin from the Group s high growth sector, Structural Steelworks Financial Year ended December 31 Order Book S$ million 200 150 100 50 69 87 130 147 162 Increasing Order Book: Group s order book as at December 31, 2007 amounted to S$162 million 0 FY2003 FY2004 FY2005 FY2006 FY2007 Financial Year ended December 31 13
Prospects & Market Outlook Prospects & Market Outlook Positive outlook for the and Middle East markets: : New Land Transport initiatives by government, with an investment plan of S$50 billion over the next 10-12 years S$40 billion will be used to double s rail network to 278km by 2020 Approved construction of a 21km North-South Expressway at a cost of S$7-8 billion Approved construction of a 5km long Marina Coastal Expressway at a cost of S$2.5 billion Ongoing infrastructure developments like MRT Downtown Line, Integrated Resorts, Sports Hub, Orchard Turn and other commercial developments Middle East: Potential business opportunities in view of various ongoing and upcoming construction projects 14
Prospects & Market Outlook Structural Steelworks (Expected Commencement) Estimated Contract Value 2008 $491m Specialist Civil Engineering (Expected Commencement) 2008 $559m 2009 $90m Contracts for infrastructural developments such as: Integrated Resort Marina Coastal Expressway Dubai Metro Rail Sports Hub MRT Downtown Line Al Raha Beach Resort Changi Airport T1 Upgrade New Delhi Airport Projects announced by Government (not included above): MRT Thomson Line MRT Eastern Line North-South Expressway Prospects & Market Outlook Established strong foothold in the Middle East: Recognised revenue of S$65.0 million in FY2007 as compared to S$4.3 million in FY2006 Order book as at end Dec 07 amounted to S$74.4 million Harvesting business development efforts in the Middle East 15
Growth Strategies & Plans Growth Strategies & Plans Continue to focus on the two core businesses Structural Steel and Specialist Civil Engineering Continue to explore opportunities in Middle East Actively pursue opportunities in India Laying groundwork in Malaysia to tap business opportunities coming on-stream in 2-3 years time 16
Key Highlights Key Highlights High-value projects secured by the Group in Build on strengths of Group s two core businesses and continue to capitalise on the Group s market leadership, both locally and regionally Increased spending on infrastructure developments by governments in Asia-Pacific and Middle East regions Well-positioned to tap on regional construction boom Concurrent efforts to pursue more business opportunities in the Middle East and India 17
Thank you 18