2014 Annual Report Fiscal Year Ended December 31, 2014
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2014 Annual Report Fiscal Year Ended December 31, 2014 89, Sec. 6, Zhongshan N. Rd., Taipei 11155, Taiwan, R.O.C. Tel: (886) 2-2833-9999 Fax: (886) 2-2833-8833 www.ctci.com.tw Professionalism Integrity Teamwork Innovation VISION The Most Reliable Global Engineering Service Provider VISION The MostPRINCIPLES Reliable Global Professionalism Engineering ServiceIntegrity ProviderTeamwork Innovation PRINCIPLES Professionalism;MISSION To Satisfy Integrity; Our Teamwork;Customers with Innovation the Optimized Engineering Services MISSION To Satisfy Our Customers with the Optimized Engineering Services Contents 02 Financial Highlights 04 Company Profile 06 Letter from the Chairman & CEO 12 Milestones 2014 13 Strategy Development and Outlook 14 Strategic Operations I. Intelligent Engineering Services II. QHSE Management III. CTCI Group IT Integration IV. CTCI Talent and Leadership Optimization 28 Business Review & Outlook I. Hydrocarbon II. Infrastructure, Environment & Power III. Environment & Resources 43 Corporate Sustainability 49 Financial Section 67 Global Network FinancialFinancial Highlights Highlights Financial Highlights December 31, 2014 and 2013 Thousands of Thousands of NT$ US$ 2014 2013 2014 For the Year: Operating revenues $38,060,203 $31,446,326 $1,203,675 Net income 1,882,119 1,641,730 59,523 At Year-End: Total assets $41,144,103 $33,748,107 $1,301,205 Long-term debt - - - Total equity 17,137,716 16,472,113 541,990 Net income per common share: NT$2.51 NT$2.22 US$0.08 Contract Amount Backlog (Million NT$) (Million NT$) 20102010 22,360 54,935 20102010 61,798 100,094 20112011 61,331 79,54220112011 90,755 154,649 20122012 40,162 60,173 20122012 96,630 153,228 20132013 40,136 66,924 20132013 110,506 163,517 20142014 38,096 77,86620142014 113,037 187,102 2010 2010 CTCI CTCI Consolidated CONTRACT2011 AMOUNT 2011 20122 2014 CTCI Annual Report 2013 2012 2014 2013 2014 BACKLOG CONTRACT AMOUNT CONTRACT AMOUNT Financial Highlights Consolidated Financial Highlights December 31, 2014 and 2013 Thousands of Thousands of NT$ US$ 2014 2013 2014 For the Year: Operating revenues $57,691,937 $52,221,958 $1,824,539 Net income 1,882,119 1,641,730 59,523 At Year-End: Total assets $56,838,301 $48,837,298 $1,797,543 Long-term debt 2,926,350 3,296,297 92,547 Equity attributable to owners of the parent 17,137,716 16,472,113 541,990 Non-controlling interest 2,565,293 2,473,376 81,129 Total equity 19,703,009 18,945,489 623,119 Net income per common share: NT$2.51 NT$2.22 US$0.08 Note : The US$ amounts are given solely for convenience and have been calculated at the rate of NT$31.62 to US$1, the approximate rate of exchange prevailing at December 31, 2014. Net Income Revenues (Million NT$) (Million NT$) 20102010 1,961 20102010 27,426 51,878 20112011 2,263 20112011 33,001 56,280 20122012 2,445 20122012 34,824 60,522 20132013 1,642 20132013 31,446 52,222 20142014 1,882 20142014 38,060 57,692 2014 CTCI Annual Report 3 NET INCOME REVENUES CompanyCompany Profile Profile Company Profile TCI Corporation, founded in 1979 with headquarters in Taipei, has over 30 years of hands-on Cexperience with approximately 7,500 employees stationed in more than 40 subsidiaries and affiliates located in 13 countries around the world. Currently, the paid-in capital reached NT$7.6 billion while its operating revenue reached a new record high of NT$57.7 billion in 2014. Being the leading Engineering, Procurement, and Construction (EPC) corporation in Taiwan, CTCI is distinguished by its professional competence in undertaking large-scale projects at home and abroad. Upholding the principles of “Professionalism, Integrity, Teamwork, Innovation”, CTCI keeps enhancing its technological expertise in service scope and committing itself to internationalization and diversification strategies in business operations. The service portfolio includes project management, engineering design, procurement, fabrication, construction, supervision, and test & commissioning. The business lines have been expanded from refinery, chemical and petrochemical into power, steel & nonferrous, storage & terminal, infrastructure, environmental engineering and waste-to-energy fields. Rooted in Taiwan, CTCI extended its project records over the globe and tapped into the markets of China, the Middle East, Europe, America, and Southeast Asia. With its technological expertise and rich experience, CTCI has become the designated partner to collaborate with for many internationally well-known engineering companies, which achieved excellent results. In recent years, CTCI furthered its engineering expertise in EPC lump sum projects with 4D applications to effectively shorten the project schedule and at the same time deliver innovative value. CTCI uses its core competency in developing green engineering to effectively lower the risk of environmental pollution and strengthen the industry’s green competency. In addition, CTCI spares no efforts in enhancing service quality, information security, environmental management, HSE management, and health care, all of which achieved laudable results. Apart from being honored with Public Construction Excellent Quality Awards by the Ministry of Economic Affairs and many others, CTCI has acquired international certifications including ISO9001:2008, ISO/IEC 27001, ISO 14001:2004, OHSAS 18001:2007, Taiwan Occupational Safety and Health Management System (TOSHMS) Performance Approval Program, Cumulative Record without Accident Proof by Occupational Safety and Health Administration, Ministry of Labor, the Badge of Accredited Healthy Workplace from the Health Promotion Administration, Ministry of Health and Welfare, as well as many others. Committed to fulfilling corporate social responsibilities with due diligence, CTCI has garnered tangible achievements in terms of corporate governance, environmental protection and social participation. On top of carrying on stable growth with determination and sustainable operations, CTCI implements green engineering technology to provide its clients with cost-effective, eco-friendly, and energy- saving solutions to innovate and enhance its green competitiveness in the industry. CTCI utilizes diverse resources to cultivate talent, actively engages in community activities and showes care for the underprivileged. Moreover, CTCI publishes Corporate Sustainability Report annually to disclose related principles and policies for developing sustainably and giving back to the society. CTCI was registered as the first enterprise in Taiwan acquiring the independent verification of the CSR Report. Thus, we 4 2014 CTCI Annual Report Company Profile have been continuously recognized by various quarters for outstanding performance in corporate social responsibilities, including Taiwan Top 50 Corporate Sustainability Reporting Award by the Taiwan Institute for Sustainable Energy, Taiwan’s Most Admired Company in the engineering and construction industry, retaining Top 1 in the contractor sector for 11 years in a row in Taiwan's Top 2000 Enterprises, and Top 50 for Excellence in Corporate Social Responsibilities by CommonWealth Magazine. Moreover, CTCI ranked the highest A++ level in the Information Disclosure and Transparency Rankings, an evaluation entrusted by TWSE and GTSM and launched by Securities and Futures Institute for all listed companies in Taiwan. According to ENR, Engineering News-Record, 2014 Sourcebook in Petroleum Sector, CTCI ranked 48th in International Contractors and ranked 42nd in International Design Firms. CTCI is even listed in MSCI Taiwan Index by Morgan Stanley Capital International Inc. (MSCI), as well as TWSE RAFI® Taiwan High Compensation 100 Index, and TWSE Corporate Governance 100 Index by Taiwan Stock Exchange Corporation. CTCI keeps moving forward to fulfill its mission: “To satisfy our customers with the optimized engineering services”. In order to reach our long-term objective, CTCI constantly pursues advancement and refinement to win the recognition and trust from customers worldwide. Looking toward the future, CTCI expects to orient itself as a robust team equipped with unparalleled competitiveness to provide diversified optimum services to its customers and actively marching towards the vision of becoming “The most reliable global engineering service provider”. Under the synergetic efforts of all members, CTCI will build a globally-recognized brand and ensure its valued customers around the globe a better future to create a win-win scenario. CTCI Corporation— Taiwan’s Leading EPC Firm that Delivers Comprehensive Services 2014 CTCI Annual Report 5 Letter from the Letter from the Chairman & CEO Chairman & CEO Dear Shareholders, Friends and Colleagues, In 2014, with all the dedication and hard work of our staff, we adopted various strategic adjustments in our business operations, and brought about outstanding results in new contracts, revenue, and backlogs, which all exceeded the record of 2013. I would hereby like to report the 2014 business review, the 2015 strategic plan and blueprint for CTCI Group as follows: 2014 Business Review Operation Results The consolidated sales revenue for 2014 amounted to NT$57.6 billion, increased by NT$5.4 billion or a 10.47 % growth compared to that of 2013. The consolidated operating expenses were NT$1.72 billion, while the consolidated non-operating income was NT$462.5 million. As a result, the consolidated net income was reported at NT$1.88 billion, an increase of NT$ 240 million over 2013. The earnings per share (EPS) stood at NT$2.51, increased by NT$0.29 from NT$ 2.22 a year earlier.