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The Channel
A Renaissance Services SAOG Group Newsletter
volume 1 issue 11
Renaissance holds 14th AGM
www.renaissance-oman.com
Renaissance Services shareholders approve the company’s financial statements, dividend distribution and other agenda matters. Also Inside:
Topaz achieves US$ 65m profit Topaz Energy and Marine announces its audited financial results for 2009.
Renaissance achieves record results Omanisation Statistics NHI Celebrates 15 Years NTI BizPro 2010 awards
PAC Bahja opens PAC Bahja has begun receiving its first contractors after nearly two years under construction.
Topaz runs for the ‘Flying Angel’ OER CEO Golf 2010
Upcoming events:
Promotions at Renaissance groups Easter - Apr 4 Promotions and new appointments recently announced at Renaissance have led to restructuring changes at the senior management level.
Q1 results
Marking Earth Hour
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Renaissance: absorbing challenges, alert to opportunity Renaissance Services has achieved record results for the ninth consecutive year in 2009. Reports of the Group’s performance was front page business news in early March, with publication of the complete Chairman’s Report and summary Annual Report hot on the heels of the assuring news. The Group achieved a credible outcome in the year despite facing the globally hardhitting economic crisis. The company’s recession-resilient results demonstrate the solid foundation for growth that the Renaissance model is built upon, explained in the Chairman and CEO Reports published in the Annual Report. For the complete texts, please visit renaissance-oman.com Every year Renaissance publishes an Annual Report to communicate with its various stakeholders: Customers, Employees, Shareholders, Suppliers, and the Communities in which we serve. The 2009 Annual Report theme carries four meaningful agenda points that sustain the company’s long-term resilience: Good Governance, Operational Excellence, Alignment with the best in oil & gas, and Local focus. The key message communicated is Renaissance’s solid foundation and capability to effectively manage periods of both the business cycle booms and busts, while the visual and creative execution tone reflects stability and confidence.
Topaz realizes strong growth Topaz Energy and Marine announced its audited financial results for 2009, posting revenue of US$ 448 million, EBITDA of US$ 127 million and Net Profit of US$ 65 million, demonstrating year on year growth of 7%, 14% and 38% respectively. Topaz also achieved record results for the ninth consecutive year and brought its total asset base on the balance sheet to US$ 874 million while maintaining a comfortable gearing ratio of 0.89, confirming the company’s strong capital structure. “Certain strategic acquisitions made in the Caspian and the Middle East in recent years, and subsequent additions to the offshore support vessel fleet are providing us consistent returns and cash flows. The strong balance sheet together with a splendid operating performance saw us navigate comfortably through the financial crisis,” said Pramod Balakrishnan, CFO at Topaz corporate.
The Channel - issue 11 - March 2010
From the 2010 Chairman’s Statement
Looking to the future In my report to you last year we faced the toughest global recession in modern times and I promised you that we would not waste this crisis. The 2009 performance demonstrates that, operationally, we managed the enormous immediate challenges of the crisis in a manner that we could still deliver growth, while the world economy contracted. The continued support of financial institutions to participate in our 2009 investment programme, in spite of the most severe credit crunch, reflects the spirit of true partnership that we share with our bankers in Oman, UAE and abroad. It is also testament to the prudence and integrity of our financial management and controls; the security and bankability of our contracts; and the confidence in our disciplined approach to investment. In 2009, while many corporations down-sized our human resources grew from > 10,000 to > 11,000 people – at the same time generating more income per capita in each of the businesses. The organization restructure is built for the permanent future, not for the temporary recession. Our constant endeavour to consider and research merger and acquisition opportunities has been as active as ever, although no specific transaction has met our criteria for active interest, the process alone is a constant investment in experience and knowledge for our team. In our current investment programme we have 13 vessels under construction in shipyards around the world: 6 vessels for the MENA region, including 4 AHTS (Anchor handling tug) vessels for the Saudi market; 5 barges for Agip KCO in Kazakhstan with 2 to be deployed in 2010 and 3 in 2011; and 1 AHTS and 1 ERRV (Emergency response vessel) for new 10-year contracts for BP in Azerbaijan. Along with the 2 Contract Services PAC projects completing construction, 10 of these new vessels shall have a positive economic impact on our growth in 2010. While there is growing evidence of the world pulling out of recession, we choose to be cautious and enter 2010 with the same tightness of discipline in managing our cash flows and our third-party risk. There is often a time-lag of effect from over-capacity in various business sectors and higher unemployment, particularly in the major developed economies. In this regard we continue to benefit from the diversity of our business portfolio. In 2009 our Engineering business was impacted negatively, but growth in the Marine and Contract Services businesses sustained us. In 2010 Engineering is coming back strongly, but we do anticipate continued and increasing pressure on utilization and margins in the spot market of the Marine business in the MENA market for at least the first half of the year. The difference, looking at 2010, from when we looked ahead to 2009, is that the scale of confidence is greater. Last year, we felt we could still deliver growth in spite of the recession and we did. This year, we are poised to deliver growth over the year in spite of some continuing impacts of the recession to which we remain ever-vigilant and alert. For the longer term, it is clear that we have a business that is succeeding and growing in spite of adversity in the economic environment. It is equally clear that this business has competence, stability and momentum. Because of this, Renaissance stands on the threshold of enormous potential on an even greater scale than all that has been achieved to date. We pride ourselves that Renaissance has been a pioneer of many firsts in our market. We do not seek to be innovative and different simply for the sake of it – indeed our disciplined approach to investment and financial control is as conservative as could be. But I can assure you, we shall be seeking out the best possible way to capture this potential for the enduring benefit of all our stakeholders.
Samir J. Fancy Chairman Renaissance Services SAOG
The Channel - issue 11 - March 2010
Executive Moves Promotions and new appointments recently announced at Renaissance have led to restructuring changes at the senior management level, most notably for Contract Services Group (CSG), as well as at Renaissance, Topaz Energy and Marine and NHI. At the Renaissance corporate level, Mr. Arindam Ray, who has completed 7 years at Renaissance, most recently as as the Executive Assistant to the CEO, and has been promoted to General Manager Mergers and Acquisitions for Topaz, seen as a crucial role to drive the group’s inorganic growth path.
At CSG, Mr. Ananda Fernando has been appointed Chief Executive Officer - CSG, having spent 22 years in the company and successfully managing the steady growth for the group as the Commercial GM for 12 years.
Mr. Saalim Gaima, having completed 22 years, has been appointed Chief Support-Services Officer.
Saalim Gaima, CSSO-CSG
Ananda Fernando, CEO-CSG
Team members supporting the CEO also include promoted managers from within the group. Mr. Adil Bahwan, who has been with CSG for 15 years, has been appointed Chief Development Officer, with responsibilities for new market entries and new projects, while also holding the role of GM at TISCO.
Mr. Joaquim D’Costa, also with CSG for 21 years, has been appointed Chief Operating Officer, while Mr. Peter James continues his role as QA/HSE Advisor which he has overseen at CSG for 11 years, and has been with CSG for 18 years.
Arindam Ray, Topaz GM M&A
Also at Renaissance corporate, Mr. Vishal Goenka has been appointed Renaissance’s Chief Financial Officer, having served as the group’s Financial Controller for 10 years.
Joaquim D’Costa, COO-CSG
Adil Bahwan, CDO-CSG
Also at CSG, Mr. Karim Shaikh has been appointed Chief Financial Officer, having fulfilled the role of Finance Manager at CSG for 19 years. Peter James, QA/HSE Advisor
Vishal Goenka, CFO
Karim Shaikh, CFO-CSG The Channel - issue 11 - March 2010
Renaissance partakes in major investor conferences
At Topaz, following the appointment of Mr. Bill Bayliss, the Engineering division’s Chief Operating Officer, a number of new managers have been appointed for the division’s business units. Mr. Tom Bower has been appointed GM Topaz Ship Building, while Mr. Suresh Sebastian has joined as GM Topaz Fabrication and Construction. Tomasz Maszka, GM Topaz Marine Turkmenistan
At NHI, Toufiq Al Ajmi has recently been promoted to Business Development Manager after having contributed instrumentally to the sales department as Sales Manager at NHI for the last 3 years. He initially joined NHI in 1995.
Stephen Thomas, Renaissance CEO and Vishal Goenka, Renaissance CFO, met with the investor communities at the BankMuscat Investor Conference in Oman, and the EFG Hermes One-on-One in Egypt this month. BankMuscat invited the top 15 performing companies from Oman and Saudi Arabia to meet with leading fund managers from around the region, while in Egypt, over 250 global and regional institutional investors met with 61 of the region's best publicly-traded companies. The EFG Hermes flagship conference, now in its eighth year, was the largest gathering of its kind in the region and marked its highest record in attendance turnout - up 66% from 2009. The record turnout is an indication that as markets begin to recover, investor appetite for MENA equities is similarly buoyant.
Tom Bower, GM Topaz Ship Building
Toufiq Al Ajmi, BDM- NHI Suresh Sebastian, GM Topaz Fabrication and Construction
At the Topaz Marine division, Mr. Paul Bundy has been appointed GM Topaz Marine Azerbaijan, while Mr. Tomasz Maszka has been appointed GM Topaz Marine Turkmenistan.
These changes reflect our continued commitment to Renaissance people and to promoting through merit and experience. By adopting the most careful methods of selection, training and promotion, we are dedicated to maintaining the best team in each field of our business groups, and making Renaissance a place where our people feel rewarded.
Renaissance Values:
Merit
Paul Bundy, GM Topaz Marine Azerbaijan
We commit to apply a policy of nondiscrimination in employment and promotion. Merit and experience alone should govern, and all should have equal opportunity irrespective of race, colour, gender or creed. To learn more about our values please visit : h t t p : / / w w w. r e n a i s s a n c e - o m a n . c o m / e n B/About_Renaissance/Values.aspx
The Channel - issue 11 - March 2010
PAC Bahja opens on time and in cost PAC Bahja, which has been under construction for less than two years, has begun receiving its first contractors lodging there. The Permanent Accommodation for Contractors facility at Bahja has 304 single, double and tripleoccupancy rooms that can house up to 600 resident contractors under Petroleum Development Oman (PDO). The long-term contracts for the new PACs at Bahja and Marmul run until 2044 and the contract value of the initial 5-year period is in excess of Rial 35 million (US$ 91 million). Senior officials from PDO visited the new Bahja site and awarded the Contract Services Group management team shields for completing 2 million man hours with no LTI.
The PAC recreation facilities include a fully equipped and staffed clinic, indoor and outdoor sports and games facilities, dining facilities supported by state-of-the-art kitchens, bakery and stores, and other buildings including meeting rooms, DVD hall, library and auditorium. The PACs also have an on-sight garden nursery to grow its own shrubs, flowers and trees.
The Channel - issue 11 - March 2010
Above: PAC Bahja facilities include 304 rooms. Below: The kitchen, clinic, library and DVD room are shown to PDO visitors.
The Channel - issue 11 - March 2010
LOCAL Employing a national workforce: Omanisation Statistics Employing a national workforce is relevant across all Renaissance businesses and geographies, and is among the Renaissance Values embedded in the company philosophy, with particular relevance to social responsibility and giving back to the communities in which we serve. By training and recruiting a national workforce, our businesses are supporting the growth of the local economy, which is essential for the long-term business perspective which Renaissance maintains. Approximately 20% of revenue generated in 2010 by Renaissance businesses is from Oman. Across all groups operating in Oman, the latest Omanisation statistics show that Renaissance is at or above its required rate for the following businesses:
% Omani
Required
38%
30%
35%
35%
TISCO
31%
30%
RCCS
35%
30%
NTI
43%
42%
NHI
38%
37%
36%
35%
Renaissance MEG: NICO CSG:
ETG:
MCG: UMS
LOCAL NHI Celebrates 15 years The National Hospitality Institute (NHI) celebrated its 15 year anniversary with a three day Annual Hospitality Exhibition at Muscat City Centre this month. This event, which has taken place since its inception in 1996, has been continually supported by hospitality industry operators over the years and this year was joined by the top international hotel chains in the country. “This is a very valuable event with growing importance as Omanisation targets in the industry continue to rise,” said Robert MacLean, Principal of NHI. The objective of the exhibition is to enable young people in Oman to see the different sides of hospitality and to give them the opportunity to speak to a training provider and future employers about job prospects and careers in the industry.
LOCAL OER CEO Golf 2010 United Media Services monthly business publication, Oman Economic Review, hosted the 6th edition of OER CEO Golf. The main highlight was this year’s new hosting venue, Muscat Hills Golf and Country Club, giving the event its green course debut and ensuing attendance by golfers was double that of previous years. The tournament was officially teed-off by HE Dr. Mohammed bin Hamad Al Rumhi, Minister of Oil and Gas, and attended by over 200 of Oman’s senior business leaders.
The Channel - issue 11 - March 2010
LOCAL NTI BizPro 2010 awards
LOCAL Topaz runs for the ‘Flying Angel’
National Training Institute (NTI) organized its 4th consecutive BizPro award ceremony, announcing the 3 major winners of the Omani Young Achievers awards and the Omani Business Leader award. The gala function was attended by Oman’s corporate leaders and featured individual presentations from Omani present and past winners, as well as speeches from Saud bin Ahmed Al Nahar, CEO of Port Services Corporation and this year’s Business Leader. Other speakers included Dr. Amer Rawas, CEO of Omantel, Michael Armstrong, Partner in charge at KPMG, and guest speaker Nabil Al Busaidi.
Six Topaz team members participated in a charity run last month to raise funds for the Flying Angel, the seafarer support vessel that visits ships anchored off the east coast of the United Arab Emirates, offering comfort to many thousands of seafarers every year. Each runner agreed to raise US$270 towards the Angel Appeal by running either a whole 21km, or 5km as part of a four-man team. More than 46 runners from various companies participated in the Ras Al Khaimah Half Marathon in aid of the Angel Appeal raising over US$23,000 to help maintain the Flying Angel. Last October, Topaz announced its commitment to manage the Flying Angel and absorb the vessel’s operating and running costs for the entire year.
Young Achievers 2010 Award winners: Hana Mohammad Masoud Al Kharusi, Unit Head NBO Taha Husain Shahdad Al Raisi, Department Head at Nawras Hani Dawood Ramdan Al-Zadjali, Head HRD at ORPC
Willie Jackson, Afloat Repairs Manager, Topaz Marine Repair
Topaz at new address The Topaz Energy and Marine corporate office has relocated to a new location at the Jumeirah Lakes Towers in Dubai.
The Channel - issue 11 - March 2010