Print less. Save more trees.
The Channel
A Renaissance Services SAOG Group Newsletter
volume 2 issue 6
Renaissance discloses Q3 2011 results Continuing revenue growth underlines the enduring value of the Renaissance franchise.
www.renaissance-oman.com
Also Inside: Renaissance wins KWD Gold Award
Financial News Headlines
CEO interviewed on good governance
New financing and capital raise initiatives are prominent Renaissance headlines in Q4.
CSR: UNICEF charity event Renaissance issues adverts for responsible driving Conclusion of CMA audit
Oman Debate 2011 Oman Economic Review (OER) organises an exciting stage for the third Oman Debate and OER Top 20.
Renaissance CEO New Year message CEO Stephen Thomas reenergizes the landscape for a promising new year.
The Channel is a digital bi-monthly internal newsletter produced by Renaissance Services which aims to reach every employee in each country of our worldwide operations. Please do forward this to your fellow team members and thank you!
Season’s Greetings to all! If you missed this card, please click http://www.nibblesoman.com/greeting/season2012.htm
Renaissance replaced traditional greeting cards with customized e-cards two years ago in a bid to go greener.
Renaissance discloses Q3 2011 results and holds conference call Highlights: • Group Revenue has increased by 10% to Rial 206 million (US$ 536 million) • Marine business Revenue is up by 25% to Rial 82 million (US$ 214 million) • Strength of underlying business performance shall enable Renaissance to absorb the impact of non-recurring items in Q4 without affect to the business • Engineering business performance has stabilised with reduced losses Renaissance Services declared its interim results for the third quarter (Q3), or nine months ended 30 September 2011, achieving revenues of US$ 535.6 million, an increase from US$ 486.5 million, or 10%, recorded in the corresponding period last year. Back on Track In the Q3 Chairman’s Statement, Samir Fancy, Chairman of Renaissance Services, said that the company has succeeded in getting key projects back on schedule with positive success, while “significant progress” was made on the refinancing and re-organisation of Topaz Energy and Marine. Topaz has been re-organised into two distinct and separate Renaissance subsidiaries, namely Topaz Energy & Marine and Topaz Engineering. The separation of the businesses brings clarity in terms of the industry sectors in which the companies operate: Topaz Energy & Marine is a pure Offshore Support Vessel (OSV) enterprise, while Topaz Engineering is structured in two divisions: Topaz Marine Engineering, serving the marine repair and ship building sectors; and Topaz Oil & Gas Engineering, operating in the Oil Field Services (OFS) sector.
Available in English and Arabic: http://www.renaissance-oman.com/en-GB/Company_Reports/Quarter_Reports.aspx
The re-organisation provides a more efficient, flatter organisational structure, and brings clarity in terms of business sector and value recognition. The changes also deliver overhead cost reductions with an annualized net reduction of > US$ 2.5 million in the corporate overhead and > US$ 3.8 million reduction in the Engineering business overhead. In particular, the new management team of the engineering business is making good progress in addressing its temporary losses. "They have restored the 100% customer-focus ethos at which this company excels. The business has been restructured and streamlined with significant savings in overheads, and increased investment in process control and professional project management. These actions have already contributed to a reduction in losses compared to the prior quarter," said the Chairman’s Statement. Excerpts from the Q3 2011 Chairman’s Statement: Of the company's marine business, Fancy said, "The business continues to perform well, although the Q3 result has been tempered by additional expenses arising in this quarter and scheduled downturn in utilisation for dry-docking and maintenance. Independent market analysis predicts strengthening rates and utilisation in spot markets over the coming year, and the company is witnessing clear signs of the start of a more positive trend." Concerning the future outlook and break-even position for Topaz, the Chairman added, "After a period of unprecedented turbulence in that business we believe the company to be well positioned to take advantage of future growth opportunities in the Caspian Sea and GCC markets. The 2012 backlog of business already in hand for oil and gas engineering is OMR 26.9 million and for marine engineering is OMR 6.5 million. With several contract opportunities under positive review, the backlog is likely to increase before year end 2011 and we expect to achieve a break-even position for the engineering business for 2012." Senior management conducts conference call with investors, shareholders and media Following the positive responses evoked from the company’s open conference call regarding the company’s half-year results (H2 2011), Stephen Thomas and Vishal Goenka, CEO and CFO of Renaissance respectively, sat down to a 45 minute open question and answer session with shareholders, investors and international media regarding the third-quarter 2011 results and statements made in the corresponding Chairman's Report. To download the session please click http://www.renaissance-oman.com/en-GB/Media_Center/Downloads.aspx The Channel - issue 6 - Nov - Dec 2011
Renaissance subsidiary Topaz announces US$ 380 million financing initiative Topaz Energy and Marine announced a US$ 380 million (Rial 146m) financing initiative that features Topaz’s offshore support vessel division, Topaz Marine, and that has roped in Standard Chartered Bank and DVB Bank to lead the initiative. Commenting on the initiative, Vishal Goenka, Chief Financial Officer of Renaissance, said, “This deal will significantly improve Topaz’s liquidity, unlock trapped equity, and increase the availability of new funds to capitalize on future growth opportunities. The interest from our relationship banks and also from new banks in this deal is very encouraging and reaffirms the market’s appreciation of the company’s business model and governance. Out of US$ 380 million, approximately US$ 125 million is for vessels under construction and for investments in new vessels.”
Nigel Anton, Managing Director and Head of Shipping Finance at Standard Chartered Bank, commented on the alliance saying, “Standard Chartered is delighted to be able to strengthen our relationship by supporting Topaz with their ambitious growth plans; our co-arrangement of this transaction together with DVB Bank underpins our belief in the future success of Topaz. Standard Chartered as a well-capitalized and liquid bank remains fully committed to the region and the shipping business.”
Renaissance Board approves plans to raise new growth capital The company’s Board of Directors has recently approved a new capital initiative which seeks to raise up to Rial 50 million (USD 130 million) through a quasi-equity instrument that will be arranged and advised by BankMuscat. The offering is subject to regulatory provisions and the shareholders’ approval, and is expected to be open to current shareholders and new investors through private placement. The proceeds will be used to fund the company’s expansion plans, primarily in the Marine business in the GCC and Caspian regions, and will also be used to further strengthen the company’s balance sheet. Commenting on the initiative, Samir Fancy, Chairman of Renaissance Services, said, “This capital raising provides Renaissance with the financial flexibility to continue our expansion plans and grow our core business, which continues to deliver a strong performance. We have made significant progress in addressing the challenges of 2011 and are pleased by the support
shown in us by our investors. We are confident that the fundamental strengths of our business model will drive profitable growth in 2012 and beyond. The new capital will help us to take advantage of future growth opportunities available to us in our core market,” Fancy added. BankMuscat has been appointed the Financial Advisor and Arranger of the capital-raising. AbdulRazak Ali Issa, Chief Executive of BankMuscat, said, “We thank the Renaissance Board for the confidence placed in our investment banking team for this important capital raising mandate. Our team has been consistently ranked amongst the top 25 global advisors over the last three years in terms of mandates won and mandates closed by Infrastructure Journal and Project Finance International. The team has successfully managed a number of large equity raising transactions over 2008-11 despite challenging market conditions. We look forward to working on this transaction with Renaissance and bring it to a successful close.”
Renaissance announces conclusion of CMA Audit Renaissance Services announced in the third quarter that the Capital Market Authority (CMA) audit initiated after the half-year results has been completed. Renaissance was found to be in overall compliance with the CMA Disclosure Regulations and Guidelines, with the exception detailed by the CMA concerning market rumors fueled in January of this year of the company’s plans for an IPO to list its subsidiary Topaz. For further details please click on http://www.renaissance-oman.com/en-GB/Media_Center/Press_Releases/Release_119.aspx
The Channel - issue 6 - Nov - Dec 2011
message the
from
CEO
Feature Story
Oman Debate 2011 throws light on new challenges
The most prestigious economic forum in the country, Oman Debate 2011, organised for the third year by Oman Economic Review in cooperation with the Capital Market Authority (CMA), was attended by toplevel officials of both public and private sectors, including heads of institutions, policy-makers and corporate captains. Anchored by renowned television host Tim Sebastian, the founder and chairman of ‘The Doha Debates’ and former BBC Hard Talk presenter, the discussion centered around topics such as Omanisation, bureaucracy, job creation, red-tapism, lack of transparency and shifting the paradigms of the education and training systems in the country to meet the requirements of a changing business landscape. The majority of panelists and participants agreed that there is an urgent need to revamp education system in the country, including training programmes, to enhance skill sets to match the requirements of the private sector. An eminent body of panelists representing both the government and the various business sectors cutting across the industry included HE Dr Salem bin Nasser Al Ismaily, Chairman, Public Authority for Investment Promotion & Export Development, HE Ahmed Al- Dheeb, Undersecretary, Ministry of Commerce and Industry, Hani Al Zubair, Executive Chairman, Zubair Automotive Group, Hussain Jawad, Chairman, W J Towell, Adil Taqi, CEO, Muriya Tourism Company, Hatem Al Shanfari, Faculty Member at the Department of Economics and Finance, Sultan Qaboos University, Dr Mohamed Abdulaziz Kalmoor, CEO, Bank Sohar,
Ross Cormack, CEO, Nawras, Faisal Al Lawati, Executive Director, Genetco, and Dr. Brian Buckley, General Manager & CEO, Oman LNG. HE Darwish Ismail Al Balushi, Minister Responsible for Financial Affairs, who was the chief guest of the event, praised Oman Economic Review for organizing the national debate and annually recognising the efforts of the corporate world through its Top 20 awards. He emphasized the role of private sector in transforming Oman to a modern and diversified economy. “A key element for a vibrant economy is a thriving private sector and Oman’s eighth five-year plan offered tremendous opportunities for the private sector to experience sustained growth,” said HE Darwish. The OER Top 20 trophies for year 2010 were presented to the largest listed companies on the Muscat Securities Market at the event, celebrating corporate excellence. Renaissance Services jumped one position to 5th place in the list. The OER Top 20 companies are Oman Telecommunications Company, Galfar Engineering & Contracting, BankMuscat, Shell Oman Marketing Company, Renaissance Services, Al Maha Petroleum Products Marketing Co, Oman Oil Marketing Company, Oman Cables Industry, Nawras, Oman Holdings International, National Bank of Oman, BankDhofar, Areej Vegetable Oils & Derivatives, Raysut Cement Company, Al Jazeera Steel Products Company, Bank Sohar, Dhofar Power Company, OMINVEST, Al Hassan Engineering Company and Salalah Port Services Company. The Channel - issue 6 - Nov - Dec 2011
Renaissance CEO discusses CSR and good governance with Schema
Video interview: http://www.cgrforum.com/Public_MediaGallery/ListCategories.aspx?Lang=2&CatI D=8&Site_ID=1&f=p
The last few years have witnessed a rapid evolution in the development of Corporate Governance and Responsibility (“CGR”) in the region. Governments have been and continue to implement legislation to regulate these practices, and the private and public sector are increasingly taking a more strategic approach to Corporate Governance (“CG”) and Corporate Social Responsibility (“CSR”). Please click the link to a video interview featuring Stephen Thomas, Renaissance CEO, as he discusses the importance, challenges and impacts of good governance and corporate social responsibility for the corporate sector in an interview with Schema, regional organizers for the Corporate Governance Forum.
CSR: Master chef in Oman for Unicef charity event Renaissance Services was among the sponsors of "Feed the World", a unique event supporting UNICEF’s Famine Children's Appeal hosted in Oman recently. The charity to help the famine victims in Africa raised close to US$50,000 and featured celebrity chef Antony Worrall Thompson as he supervised top CEOs and key business figures in a cooking contest. Other sponsors included Oman Air, MB Petroleum Services and Daud Holdings Antony Worrall Thompson is an award winning celebrity chef, author and television presenter. Having been diagnosed with Syndrome X, which can lead to diabetes, Thompson is frequently asked to comment on serious food issues such as diabetes, obesity and eating habits in children. Celebrity Chef Antony Worrall Thompson
Safety first: Renaissance issues advert for responsible driving in November Road safety is a serious concern in Oman and around the world – according to the World Health Organization, 1.2 million people are killed on roads every year and up to 50 million more are injured. Speeding is the leading cause of road accidents by human consequence. To highlight this urgent situation Renaissance created a short series of public awareness messages advocating road safety and reissued the following advert with harrowing statistics for the month of October. The advert copy reads: October was one of the worst months so far this year for Oman in terms of road deaths, new statistics released by the Royal Oman Police show. As many as 110 people were killed across the country in traffic accidents during the month, while another 903 sustained injuries, in a total of 670 incidents. Speeding and not wearing seat belts are the leading causes of road accidents. Please drive safely.
The Channel - issue 6 - Nov - Dec 2011