Annual Report 2009 How to Use This Report
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Annual Report 2009 How to use this report The buttons to the right of every page (also pictured below) are intended to aid navigation through this report. Where the button appears in pale blue the relevant action is not available for that specific page. See example of help page button below: The function for each button is explained below: Go to contents page Go to next page Go to previous page Return to start of current section Full screen view on / off Go to help page Go to contact page Mermaid Marine Australia Limited ABN 21 083 185 693 Corporate Directory Directors Tony Howarth Chairman Jeffrey Weber Managing Director James Carver Executive Director Jeffrey Mews Non-Executive Director Mark Bradley Non-Executive Director Company Secretary Dylan Darbyshire-Roberts Registered Office Eagle Jetty, 20 Mews Road FREMANTLE WA 6160 Telephone: 61 8 9431 7431 Facsimile: 61 8 9431 7432 Email: [email protected] Internet: www.mma.com.au Auditors Deloitte Touche Tohmatsu Chartered Accountants Level 14, Woodside Plaza 240 St Georges Terrace, PERTH WA 6000 Telephone: 61 8 9365 7000 Facsimile: 61 8 9365 7001 Solicitors Blake Dawson Level 32, Exchange Plaza 2 The Esplanade, PERTH WA 6000 Telephone: 61 8 9366 8000 Facsimile: 61 8 9366 8111 Bankers National Australia Bank Limited 100 St Georges Terrace, PERTH WA 6000 Telephone: 1300 889 398 Facsimile: 61 8 9441 9282 Contents Chairman’s Address 5 Managing Director’s Review of Operations 6 Corporate Governance Statement 14 Directors’ Report 19 Auditor’s Independence Declaration 33 Audit Report 34 Directors’ Declaration 36 Income Statement 38 Balance Sheet 39 Statement of Changes in Equity 40 Cash Flow Statement 42 Notes to the Financial Statements 43 Additional Stock Exchange Information 86 MMA Board of Directors MMA’s ongoing development and success is a strong endorsement of the performance of the Company’s Board, management and employees. Net profit after tax increased by 48% Earning per share increased by 23% Mermaid Marine Australia Limited Annual Report 2009 4 Chairman’s Address The past year has been characterised by extreme volatility and Apache Energy’s offshore operations. The key to these uncertainty in global markets. At Mermaid Marine we have acquisitions was the sound financial position of the Company focussed on controlling the things that we can control and leading into the global financial crisis. ensuring we have the flexibility at Board and Management level to deal with the challenges and opportunities that arise. During the year the Board undertook a detailed risk analysis across the organisation and the Audit and Risk Committee At the same time we have been drawing on the relationships has been increased in size to assist in managing this critical the Company has invested in over many years with its clients, component of the company’s compliance regime. The balance bankers, shareholders and suppliers. These relationships between risk and reward is a core function of the Board and take on a whole new level of importance in times of extreme Senior Management. uncertainty. The Oil and Gas market in Australia, particularly around LNG Despite the challenging macroeconomic environment, I am developments, has a particularly positive outlook. Woodside pleased to be able to report that MMA is continuing to perform Petroleum is currently undertaking construction of the Pluto well and has produced another year of substantial growth development and a Final Investment Decision has recently in earnings. Net Profit After Tax increased by 48% on the been made on the Gorgon development. Similarly the Browse prior year to $26.5 million and Earnings per Share increased Basin contains a number of highly prospective gas fields with by 23% to 14.5 cents per share. In May 2008 the Company a reasonable expectation of production facilities in the future. raised $47 million in additional capital to fund future growth and shareholders should continue to see the benefit of this MMA’s ongoing development and success is a strong investment in the 2010 financial year. endorsement of the performance of the Company’s Board, management and employees. My colleagues on the Board In 2008 MMA committed to a new dividend payout ratio of have provided stability at a time of uncertainty and I thank 40-50% of earnings. As such, MMA paid a fully franked two them for their efforts. The management team led by Managing cents per share interim dividend in April 2009 and announced Director, Jeff Weber, has produced an outstanding result for a final fully franked dividend of four cents per share to be paid shareholders in the 2009 financial year. in October 2009. This is effectively a 200% increase on the dividend flowing from the 2008 financial year and reflects a We look forward with some optimism to 2010 and expect to desire by the Board to put franking credits in the hands of our continue to deliver growth in earnings for our shareholders. shareholders where they are of maximum benefit. Capital expenditure for the year was $44 million with the majority of this being spent on new developments at the Dampier Supply Base. The expansion of the wharf facility in Dampier was managed by our own team and was completed on time and under budget. The expansion has doubled Tony Howarth our berth capacity at Dampier, and activity has increased Chairman commensurately. In addition, work commenced on the upgrade of the Dampier Supply Base to support the Gorgon Project. The completed facilities will be progressively handed to the Gorgon team through the remainder of this calendar year. Both the wharf and supply base developments are expected to drive future growth in earnings for the company. MMA also took the opportunity to bolster its fleet of vessels during the second half of the year. As previously announced, the newly acquired Mermaid Vision presents a new opportunity for MMA to become more involved in the offshore drilling market. The Mermaid Voyager, which delivers in September, is scheduled to spend its first year in our fleet supporting Mermaid Marine Australia Limited Annual Report 2009 5 Managing Director’s Review of Operations The 2009 financial year was another year of strong growth for Mermaid Marine Australia Ltd (MMA). The result was particularly pleasing in light of the challenging economic environment experienced throughout the year. Net operating profit after tax (NPAT) increased by 48% on Given the Board and management team’s belief that domestic the previous year to $26.5 million. The compound annual demand for the Company’s services will be sufficient to growth rate in MMA’s NPAT over the last four years is 68%, drive ongoing growth in the medium term, MMA’s overall enabling MMA to substantially outperform both the ASX strategy remains primarily Australia focussed. However the 300 and Small Ordinaries over the same time period. Total strategy also recognises that as MMA continues to grow, Shareholder Return for the year was a very credible 25.6% its international operations will need to play an increasing role. This measured international expansion is being driven Each of MMA’s operating divisions delivered strong results through our Singapore Company. for the year, with a particularly encouraging performance from the expanded Dampier Supply Base and from the In terms of our Australian business, strategically we wish Company’s recently established international business. to grow our market offer into the exploration sector of the offshore oil and gas industry. The purchase of the new Strategy vessel ‘Mermaid Vision’ during the year was consistent with MMA is two years into a five year strategy which is reviewed this goal. annually to ensure that it remains relevant in relation to the market in which the company is operating. Detailed business The 2010 financial year will see the company continuing to plans are developed on an annual basis to reflect the strategy invest in new vessels and supply base infrastructure and for the next 12 months. assets as part of our ongoing growth strategy. Mermaid Marine Australia Limited Annual Report 2009 6 Managing Director’s Review of Operations Financial Highlights It was also encouraging from an operational outlook to see the integrated nature of our service offering in Dampier MMA’s revenue increased by 10% to $164 million for the continue to gain traction as a differentiating factor in the year - a smaller increase than might be expected given the offshore oil and gas market. significant increase in NPAT. This is due to a percentage of the Company’s vessel revenue being generated by the Vessel Operations international operations where, due to a different cost MMA’s vessels continued to experience high utilisation structure, lower revenues are generated to achieve the levels during the year, successfully supporting a number of same return on asset. Consequent to these international offshore construction programmes. operations EBITDA, EBIT and NPAT margins all improved over the year. As highlighted in the Chairman’s Address, The year commenced with finalisation of the construction MMA was in a position to substantially increase dividends of Woodside Petroleum’s (Woodside) Angel platform and tie from the previous corresponding period. in. From there some of our vessels sailed to the Bonaparte Basin to support the construction of the ENI Blacktip Project, MMA has a strong focus on return on assets as a key measure which ran until April. of performance and driver of investment decisions. Return on assets for the year reduced slightly to 14.5%. However, this is Also during this time MMA provided vessel support for Apache’s expected to improve in the 2010 financial year as investments Van Gogh project and BHP Billiton’s Pyrenees project. made in 2009 begin to contribute to earnings.