FY08 Financial Highlights

The Group's revenue for FY08 increased by 183.4% from US$151.18 million in FY07 to US$428.44 million in FY08. The increase was mainly due to increased activities in EPCIC projects which comprises primarily of transportation and installation of offshore pipelines and platforms in Malaysia, Brunei, Indonesia and India.

The Group's gross profit margin declined from 28.3% in FY07 to 15.0% in FY08. The decline was mainly attributable to higher cost of sales due to the delayed delivery of two vessels as well as higher subcontractor costs relating to fabrication of offshore structures. As a result of the delay in vessel delivery, projects slotted for completion in the 4th quarter of FY08 were not completed. The delay also exacerbated the shortage of construction vessels and resulted in higher cost due to multiple mobilizations and de-mobilizations of vessels. Both vessels were subsequently delivered in January and February 2009. Overall, the Group's profit after tax fell 20.6% reflecting the higher cost of sales.

As at 31 December 2008, the Group had an order book of US$596 million as compared to US$350 million in February 2008.

Business Segments Review

As at 31 December 2008, the Group operated a fleet of 32 vessels compared to 28 vessels at the end of FY07. While Offshore EPCIC will continue to be the main contributor to the Group's revenue for the next few years, with the Group's mid-term vessel expansion strategy to increase the fleet to 52 vessels by the end of 2010, we expect the contribution from the Offshore Marine Support and Shipbuilding & Repair segments to continue to grow.

Cashflow

The Group's total equity increased from US$177.5 million in FY07 to US$207.1 million mainly due to the US$39.5 million profit for the year ended 31 December 2008. The Group's net debt to equity ratio is 1.01 times largely due to bank borrowing and issuance of bonds to finance the Group's capital expenditure programme and working capital.

Cash and cash equivalents decreased mainly due to net cash used in investing activities for the purchase of vessels which was offset by net cash generated from financing activities as a result of proceeds from new bank loans and issue of bonds.