Chairman's Statement
Extracted from 2008 Annual Report
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present to you the
annual report for financial year ended 31 December 2008 (“FY2008”).
In FY2008, we continued to be profitable by growing our business at
a steady pace. Revenue rose by 15% to S$94.6 million on the back
of increased shipbuilding and ship conversion activities while earnings
were up by 10% to S$19.2 million. To reward
our shareholders for their confidence in BH
GLOBAL, we have declared a first and final
cash dividend of 1.2 cents per ordinary share
(one-tier tax exempt).
Our Belief
In our business, it is crucial to react strategically
and swiftly to changes happening around us.
To enhance our competitive edge, we constantly
review our strategies to ensure that it is in line
with our corporate objectives. Our primary
objective is to build a business to last.
Key Developments in FY2008
FY2008 was a fruitful year for BH GLOBAL. Our strategies remained consistent particularly in the
following areas: |
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Expanded capacity and greater supply chain management capabilities |
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We are very pleased to share with you our joy for the new office at 10 Penjuru
Lane. The acquisition was completed during the year and we moved into the new
premise in November 2008. Now, with the expanded warehousing facilities of
approximately 20,000 m2 in total land area, we are able to better serve our
customers and improve our supply chain management capabilities.
On 22 January 2009, we entered into a share subscription agreement with Z-Power
Automation Pte Ltd (“Z-Power”) at a price of S$450,000 to acquire 60% stake
in the company. Z-Power specializes in the assembly, manufacture and repair of
switchboards and switchgears for vessels.
Subsequently, we invested in Sky Holding Pte Ltd (“Sky Holding”), a manufacturer
and supplier of various types of wire, including specialty steel wire used in cable
shielding, on 18 February 2009. Under the agreement, BH GLOBAL will be
the major shareholder of Sky Holding by holding 60% of the latter’s total share
capital.
On 25 February 2009, we announced the subscription of 34% shareholdings in
Dream Marine Ship Spare Parts Trading L.L.C (“Dream Marine”) in Dubai, United
Arab Emirates. Dream Marine is primarily engaged in the business of ship and
boat spare parts and component trading. Through this acquisition, we are able
to expand our own range of products and services as well as our geographical
reach beyond Singapore.
By adding Z-Power, Sky Holding and Dream Marine to the Group, BH GLOBAL
can provide a more comprehensive supply chain solution package to its customers,
which consist of ship owners, operators, chandlers, rig-builders and shipyards.
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| (2) |
Wider product offerings |
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In 2008, the Group was appointed by a few overseas principals as their sole distributor in Asia
Pacific region. With these new distributorships, BH GLOBAL now offers wider variety and range
of marine cables and accessories. |
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| (3) |
Value-added services |
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We continue to believe in delivering value to our customers. Some of the value-added services
include project management and warehousing support, where we work very closely with all in the
shipping procurement agencies, prime installers and integrators to identify vulnerabilities in their
supply chain and provide useful recommendations for improvements. We offer sales support and
cost efficient cable management programs as well. All these efforts have proven to be effective
in engaging closer ties with our customers while at the same time enhancing our operational
efficiency and profit margins. |
Awards and Recognitions
As an extra bonus, we received several awards this year. In February 2008, BH GLOBAL was bestowed
the Silver Award for the Best Investor Relations for Companies under S$500 million market capitalization.
In September 2008, we were delighted to be selected as one of the top 200 “Best Under A Billion”
enterprises by Forbes Asia for the second consecutive year. In November 2008, we became the only
marine company to emerge as one of the 14 winners in the Promising Brands Category at the Singapore
Prestige Brand Awards 2008 (“SPBA”) in recognition of our branding initiatives. We felt very honored
with these awards as they marked our achievements towards greater corporate transparency, better
investor communication and branding efforts. We believe these attributes differentiate us from our
competitors. The awards show that we are heading in the right direction.
In addition to that, the Group has also been chosen as one of the Best Performers in ST Marine
Annual Suppliers’ Performance Evaluation in November 2008, and will be awarded privileges under
the Preferred Suppliers’ Program. The recognition is encouraging especially in our quest to establish
ourselves as a comprehensive supply chain solution provider instead of a mere distributor. We believe
in becoming a long term partner to our customers as can be seen from our brand promise – Availability,
Reliability and Valued Partner.
Business Prospects and Outlook
FY2009 will be a challenging year. In the light of the global financial and economic turmoil, the shipping
industry is experiencing slowdown in the orders for new vessels in the region in recent months. However,
as the number of vessels in the maritime industry has significantly increased over the past few years, the
demand in ship repair and conversion projects is expected to cushion the decline in new shipbuilding
orders. This is expected to translate into sustainable demand for the Group’s quality marine cables,
lighting equipment and accessories.
By leveraging on the strong net cash position of S$8.1 million, BH GLOBAL is well positioned to take
advantage of opportunities for synergistic acquisitions regionally in strategic markets such as Singapore,
Middle East and PRC. We will continue to actively explore potential strategic partners that would
complement the Group’s core business as a whole.
Nevertheless, the overall strategy for FY2009 would be prudent and cautious in the best interest of the
Group and shareholders.
Heartfelt appreciation
Last but not least, on behalf of the Board of Directors, I would like to take this opportunity to express my
gratitude to the management team and all our staff for their unwavering support and dedication; and to
our customers, suppliers, bankers and business partners for their continuous confidence and finally, to
our shareholders for putting their trust in us. Thank you!
Alvin Lim Hwee Hong
Executive Chairman
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