Apersonalaccount
ofFY2012
Apersonalaccount
ofFY2012
Chairman’smessage
Chairman’smessage
14
BAKER TECHNOLOGY LIMITEDANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITEDANNUAL REPORT 2012
15
InMarch last year, the Group disposed of its remaining
49% stake in York, amanufacturer of trailer axles for the
heavy transportation industry.The disposal was in line
with the Group’s strategic focus on the marine offshore
sector.
TheGroupalsopersevered througha24-month legal suit
with SembcorpMarine Ltdand inMay2012, judgement
was declared in favour of PPLH.
Recognition forcorporategovernance
Raising the level of corporate disclosure is an enduring
commitment that theGrouphasmade to its shareholders.
Every year, we review our corporate governance
practices to align them to best practices. I am glad to
inform our shareholders that Baker Tech has improved its
performance in theGovernanceand Transparency Index
(“GTI”), which is co-publishedby TheBusiness Times and
theNUSCorporateGovernanceand Financial Reporting
Centre. Our GTI score in 2012 improved by 12 points,
from54 in 2011 to 66.
As a result, Baker Tech was ranked 30
th
amongst more
than600 companies in the 2012 issue of theGTI, a vast
improvement from its ranking of 292
nd
in 2009.
I am pleased that our efforts in corporate disclosure
have also been recognised at the Singapore Corporate
Awards 2012, Baker Tech won its second consecutive
Silver award for Best Annual Report (for companies
under S$300million inmarket capitalisation).Theaward
acknowledges outstanding annual reports for excellence
in financial reporting presentation, high level of
corporate disclosures and transparency. In the previous
three consecutive years, theGrouphadalsowonawards
in the “Best Managed Board” category.
Journeying Forward
Our journey with you, dear shareholders, continues
with renewed vigour. The Group begins 2013 with a
committed focus on growing its presence in the marine
offshore sector, by leveraging on its strong foundation in
offshore engineering and deep knowledge of the sector.
Even after paying out the proposed special dividend,
the Group believes that it would still have significant
cash reserves for future investments and acquisitions to
support the next course of growth for Baker Tech.
Over the years, our core operating subsidiary Sea
Deep Shipyard Pte. Ltd. ("Sea Deep"), has grown to be
a reputable niche manufacturer and provider of highly
specialisedandcritical components foruseondrilling rigs
in the offshore environment. It has a proven track record
for superior performance and reliability, an attribute
that is much valued by customers in an environment of
increasingly stringent safety standards.
In the wake of the global financial crisis and continued
concerns over the Eurozone, Sea Deep’s net order book
had decreased from US$80 million to US$49 million
as at end 2012, and these orders are expected to be
delivered over the next 12 – 18 months.We expect the
order book to improve this year as the charter rates for
jack-up drilling rigs have increased steadily.
As theglobal economicenvironment remains challenging
and uncertain over the next 12 months, the industry
continues to be weighed down by the tight availability
of credit in the financial markets. To enhance its market
competitiveness, Sea Deep will continue to differentiate
itself through product excellence, continuous innovation,
on-time delivery and superior customer service.
During the year, we also increased our stake in Oslo-
listedDiscoveryOffshoreS.A. (“DO”) from17% to20%,
making it an associated company of theGroup.We are
optimisticabout theprospects of DOwhoowns two ultra-
high specifications rigs under construction. Oil and gas
operators increasingly prefer newer assets with greater
capacity and efficiencies that are capable of handling
more demanding drilling requirements and stricter
operatingenvironments.Asa result, charter opportunities
and charter rates for new ultra high specification, harsh
environment jack-up rigs are expected tobe robust in the
coming years. DO takes delivery of its first rig in June
2013 and the second in September 2013.
TheGroup expects to remain profitable in 2013.
Appreciation
On behalf of the Board, I present my heartfelt thanks to
our shareholders for their support and patience.We are
also grateful for the trust and support of our customers
and suppliers, business partners, industry professionals
and our staff.
I would like to acknowledge the hard work and loyalty
of the management teamwho pressed on in the face of
a tough operating environment and a long drawn out
legal suit.
I also wish to thank my committed colleagues on the
Board for their guidance, wise counsel and solidarity as
we embark on the next leg of our journey together.
“It is good to have an end to journey toward; but it is the
journey that matters, in the end.”
- Ernest Hemingway
We look forward to continuing the journeywith you,
LimHoSeng
Chairman of the Board
April 2013
