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KBC Advanced Technologies plc

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									KBC Advanced Technologies plc
       Interim Results
   Six months to 30 June 2002
            KBC - Leading consultants in the
               downstream oil industry
Formed in 1979 as an independent consulting business


Global operation               =       USA/UK/Holland/Singapore/Japan

Serves the hydrocarbon         =       Over 200 clients worldwide
process industry

Independent consultant         =       No conflict with contractors, process
                                       licensors, catalyst and hardware
                                       suppliers or operating oil companies




IMPROVING DOWNSTREAM PROFITS       August 2002                            2
                     KBC - Service Offering

     1. Process Consulting
           Profit Improvement Program (PIP)
           11 month program
           Development of refinery simulation base case
           Identification of profit improvement opportunities
     2. Implementation Services
           2nd and 3rd year program
           Implementation of opportunities identified in PIP
     3. Reliability, Availability & Maintenance (RAM)
           Turnaround and shut down optimisation
           Inspection and preventative maintenance best practice




IMPROVING DOWNSTREAM PROFITS       August 2002                      3
                     KBC - Service Offering
     4. Planning and Scheduling
           Management of crude and feedstock costs
           Reduction of inventories and internal movements
     5. Other Services
             Remote monitoring and technical outsourcing
             Energy conservation and clean fuel studies
             Project risk assessment and analysis
             Capital project design
             Economic and market evaluation
     6. Software
           Petrofine – refinery wide simulation
           Refinery reactor models



IMPROVING DOWNSTREAM PROFITS       August 2002                4
                  Overview – First Half 2002

    Global economic slowdown gives rise to difficult trading
     conditions
    Sales order cycle slow for first four months of the year
    Signs of improvement in May and June
    Successful integration of Petroleum Economics and Linnhoff
     March
    Sale of Hyprotech by AEA to Aspen Technology Inc delays
     commercialisation of HYSYS.Refinery



IMPROVING DOWNSTREAM PROFITS    August 2002                     5
       Operational Highlights – First Half 2002

    Slow start to 2002 with low utilisation
    Pick up by end of period with six new PIPs started since
     1 June
    First PIP in Russia and second Petrochemical PIP started
    Continued growth in South America with award of $15m
     multi–refinery, 30 month contract
    Strong growth in Reliability and Maintenance services



IMPROVING DOWNSTREAM PROFITS   August 2002                   6
            Summarised profit and loss account
                                          6 months to          6 months to    12 months to
                                         30 June 2002         30 June 2001    31 Dec 2001
                                                     £000            £000            £000
   Turnover                                        20,186           19,347         42,000
   Operating profit                                 1,253            1,872          4,158
   Goodwill amortisation                             (204)               -              -
   Other operating exceptional items                 (851)           7,414          7,414
   Net Interest                                       204              315            713
   Profit before tax                                  402            9,601         12,285
   Taxation                                          (140)          (3,011)        (3,972)
   Profit after tax                                   262            6,590          8,313
   Dividends                                         (636)            (620)        (2,002)
   Retained (loss)/profit                            (374)           5,970          6,311


   Earnings per share - basic                       0.54p           13.67p          17.20p
                      - fully diluted               0.54p           13.58p          17.09p
                      - basic before goodwill
                        and expectional items      2.19p             2.90p           6.46p
   Average number of shares in issue              48.5m             48.2m           48.3m
IMPROVING DOWNSTREAM PROFITS                    August 2002                                  7
        Summarised group cash flow statement

                                       6 months to       6 months to   12 months to
                                      30 June 2002      30 June 2001   31 Dec 2001
                                              £000             £000          £000
 Net cash from operations                      1,668          4,592          5,435
 Operating exceptional items                    (851)         7,414          7,414
 Net interest received                           204            315            713
 Tax paid                                     (1,586)        (1,000)        (3,176)
 Capital expenditure                            (397)        (1,851)        (2,166)
 Dividends paid                               (1,361)        (1,249)        (1,893)
 New shares issued                                36            121             127
 Net cash outflow from acquisitions           (5,179)             -        ____ -

 Net cash generated                           (7,466)         8,342         6,454



IMPROVING DOWNSTREAM PROFITS            August 2002                              8
             Summarised group balance sheet

                                 At 30 June     At 30 June   At 31 Dec
                                       2002          2001        2001
                                       £000          £000        £000

Fixed assets                         11,154         6,358       5,937
Net current assets (excl cash)        6,994         2,426       4,786
Cash                                 10,744        20,158      18,218
Creditors due after 1 year             (600)            -           -
Provisions                             (719)         (804)       (775)
Net assets                           27,573        28,138      28,166

Share capital and reserves            7,466         7,424       7,430
Profit and loss                      20,107        20,714      20,736
                                     27,573        28,138      28,166



IMPROVING DOWNSTREAM PROFITS      August 2002                            9
                                   Revenues by region

                   2001 12 mths - £m                                            2002 1st 6 mths - £m


             7.7                                                          4.3
                                                                                                            5.8
                      20%                                                         21%            29%
                                   58%
                22%                                                                50%
                                                22.5
      11.8
                                                                                   10.1


       Europe/Middle East/Africa   Americas   Asia                   Europe/Middle East/Africa   Americas     Asia




IMPROVING DOWNSTREAM PROFITS                           August 2002                                                   10
                          Revenues by business area
      £m

                      10.1


                    8.5

                          6.9
                                         6.5
           5.96.1                              5.9
     5.5                                                                                      5.3
                                                             5.2                                    5.0
                                   4.7           4.8
                                                       4.5
                                                                     3.9
                                                                                        2.8
                                                                                  2.4                                   2.2
                                                                            1.9                            1.9 1.72.1         1.81.9




           PIP/Process              Implementation                    Other Consulting                    Software (excluding
           Consulting                  Services                                                               Sigmafine)

                                H2'99      H1'00        H2'00        H1'01          H2'01             H1'02


IMPROVING DOWNSTREAM PROFITS                                  August 2002                                                          11
                                           Order book value
             30


             25


             20
£ Millions




             15


             10


              5


              0
                  Dec-98         Dec-99        Dec-00        Jun-01        Dec-01         Jun-02
                  £17M           £21M          £35M          £40M          £28M           £29M
                           within next 12 mths - base fees    within next 12 mths - fees @ risk
                           > 12 mths ahead - base fees        > 12 mths ahead - fees @ risk

  IMPROVING DOWNSTREAM PROFITS                           August 2002                               12
                          Consultant utilisation

          90
                  79
          80
                                               74               73
          70                   64                                            65

          60

          50
      %
          40

          30

          20

          10

           0
                   H1           H2                  H1           H2           H1
                      -   00       -   00              -   01       -   01       -   02



IMPROVING DOWNSTREAM PROFITS                August 2002                                   13
           Acquisitions profit and loss account

                                6 months to
                               30 June 2002
                                    £000

   Turnover                        1,279
   Operating profit                  298
   Goodwill amortisation           _(204)
   Operating profit after
   Goodwill amortisation                94
   Integration costs                 (206)




IMPROVING DOWNSTREAM PROFITS      August 2002     14
                   Acquisitions - continued
   Petroleum Economics: Operations relocated to KBC Walton office
   (PEL)                PEL services added to PIP proposals
                               Core business on plan
                               New opportunities arise in due diligence and
                               other services to Financial Institutions
   Linnhoff March:             Operations integrated with KBC Energy
   (LM)                        Business Line, now led from LM office in
                               Manchester
                               Technology and tools rationalised to pick
                               best in class from each company
                               Core business ahead of plan
                               New opportunities being pursued – refining
                               and other process industries
IMPROVING DOWNSTREAM PROFITS         August 2002                           15
                          Software alliance

      Hyprotech sold by AEA to Aspen Technology
      Rights to HYSYS.Refinery remain with AEA for duration of
       agreement with KBC
      Arbitration continues to resolve commercial difficulties
      Discussions with Aspen Technology and AEA are ongoing to
       attempt to find resolution of all issues
      Sales of HYSYS.Refinery software on hold until disagreement
       resolved




IMPROVING DOWNSTREAM PROFITS         August 2002                     16
               Longer term industry outlook

      Fall in refinery margins in last 12 months and continued over-
       capacity leading to focus on costs and profitability

      Budgetary constraints reduce discretionary expenditure for
       consulting services in current economic downturn

      Competitive pressures of globalisation, deregulation and clean fuel
       specifications will continue to impact the oil industry

      Short term prospects of improvement in product demand limited

      No significant change in the number of large complex sites – the
       key market for KBC’s services



IMPROVING DOWNSTREAM PROFITS        August 2002                           17
                                             Penetration of Available PIP Market
                                                                        at 30 June 2002


                                                                     KBC Penetrated     Available Market
                           80                                                                                                         TOTAL AVAILABLE
                                                                                                                                           MARKET
                           70
                                                                                                                                      Excludes ref ineries
                                                                                                                                    owned by Exxon orShell
                           60
 Number of refineries




                                                                                                                                   Excludes ref ineries under
                           50                                                                                                      30,000 barrels a day (bbl)


                                                                                                                                           Includes:-
                           40
                                                                                                                                       25%of ref ineries
                                                                                                                                       30,000-50,000bbl
                           30
                                                                                                                                       50%of ref ineries
                           20                                                                                                          50,000-70,000bbl


                                                                                                                                       100%of ref ineries
                           10                                                                                                           over 70,000bbl


                             0                                                                                                       KBC experience has
                                                                                                                                       shown t hat prof it
                                      N America    S America   W Europe      EE / FSU        Africa   Asia Pacific   Middle East       opport unit ies are
                        Tot al Ref ineries   151      75        85           94              37            98           67
                                                                                                                                   great er f or more complex
                        Available Market      69      33        67            65             14            71           42
                                                                                                                                   ref ineries over 70,000bbl




IMPROVING DOWNSTREAM PROFITS                                                   August 2002                                                      18
                                Strategy

   Resolve difficulties with Software partnership with AEA and Aspen
    Technology
   Develop a ‘World Class Refining’ product to meet the vision and the needs
    of our clients, typically a 5 year program
   Develop and/or acquire a broad range of services to address the expanded
    product requirements
   Seek to increase further the length of client engagements through
    evergreen technical support services
   Reduce vulnerability of KBC revenue streams to economic cycle



IMPROVING DOWNSTREAM PROFITS        August 2002                         19

								
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