Investor Relations - News

Press Release - Metalock Forges Ahead With S$4.61m Profit For The Nine Months Ended 31 Decemeber 2002

SINGAPORE - 27 JANUARY 2003 - Mainboard-listed engineering group Metalock (Singapore) Limited today announced a 3rd quarter profit after tax of S$778,000 on a turnover of S$12,063,000, bringing its year-to-date performance to S$4,614,000 for the nine months ended 31 December 2002.

Commenting on the Group's performance, Mr K.K. Kuah, Metalock's Chairman & CEO, said, "The result accomplished is an attestation that the Group's efforts in divesting the non-performing business units which allowed for more focused management attention on the core divisions, has finally paid off. In fact, the absence of losses from the divested units had been pivotal in securing the improvements, with the quarter's profits contributed entirely from the operating fronts."

The Group's Turbocharger & Fuel Injection business enjoyed a full three-month contribution in the current quarter from its newly acquired fuel injection business which had performed close to expectations. The Oilfield division also registered healthy contribution in spite of the erosion of its profit margins due to intense competition.

After a strong showing in the first half, performance of the Subsea Robotics division weakened in the current quarter as its North Sea operations experienced an unusually severe winter period, coupled with the loss of revenue arising from the loss of a heavy work-class ROV unit during an operation in November 2002. The ROV unit is fully insured. Construction of the replacement unit has since been undertaken and is expected to complete around the beginning of the new financial year.

Notwithstanding this, the Group's net profit for the quarter was 25% higher than the comparative quarter.

Looking ahead, Mr Kuah said, "The overall operating environment may become increasingly difficult due to external factors beyond our control such as the impending threat of war in Middle East, the on-going drought in Australia and the severe winter conditions in Europe. The gloom clouding over the global economies is also unlikely to clear in the short term. The challenge is set for the Group to overcome these hurdles."

"We are unlikely to see any major contribution from the Subsea Robotics division in the 4th quarter pending a recovery in the North Sea market where our primary operations are based. Taking a longer-term view, we have our eyes set on Asia. The newly developed range of Swift ROVs systems will be earmarked principally for the Asian waters where the demand for subsea services is increasing and the working environment is less susceptible to unfavourable weather conditions," said Mr Kuah.

The Group will also continue to see satisfactory performance from its Oilfield division. Well on schedule, the systematic equipment renewal and upgrading programme will enhance the workshop capacity and efficiency of the division upon completion.

The Turbocharger & Fuel Injection division will also commence its planned expansion and integration of the fuel injection business in the 4th quarter, through leveraging on its nationwide network across Australia. It will continue to make positive contributions to the Group despite the adverse impact of the on-going drought in Australia.

The Group expects to register a comparable profit in the 4th quarter.

Metalock (Singapore) Limited Group specialises in engineering services, and is primarily involved in oilfield equipment repairs as well as the design, production and operation of subsea remotely operated vehicles. The Group also owns the leading independent turbocharger supplier and repairer in Australia. It has recently acquired a complementary fuel injection business.