We secured new orders worth
Rs.1120 Crores which include six orders worth Rs.503 Crores for seismicactivities in India and Rs.617 Crores for oilfield operations and maintenancecontract in Nigeria (through our subsidiary company)
I feel privileged and honoured to address my first communication to you. It has been ayear of change and turnaround for the Company. As I look back at the year gone by itgives me immense satisfaction to see the progress that the Company is making under the newmanagement which came into effect from August 5 2016 post takeover of the Company byOilmax Energy Private Limited. There has been a positive turnaround for the Company interms of operations and profitability and we will strive to make progress in thisdirection.
We secured new orders worth Rs.1120 Crores which include six orders worth Rs.503Crores for seismic activities in India and Rs.617 Crores for oilfield operations andmaintenance contract in Nigeria (through our subsidiary company). The new orders clearlyreflect the faith reposed on us by the major oil companies (at national and globallevels). We look forward to capitalise on opportunities that could come up under theNational Seismic Programme launched by the Government of India. On the Oilfield Operationand Maintenance (O&M) space being an extremely cost efficient service provider ascompared to global peers we see a lot of opportunities in producing assets.
Post acquisition the Company has implemented several initiatives to strengthen thebalance sheet. These have helped us to bring about a much-needed financial turnaround forthe Company and include:
1. Infusing additional equity by way of preferential allotment of warrants and shares.This has significantly improved the debt to equity ratio of the company.
2. Repayment of loans
3. Diversifying into O&M activities to add additional avenue of growth. O&Mbusiness also gives better cash flow visibility to the Company
4. Improve business focus by selling of non-strategic equipment
5. Replacing capital intensive business model to an asset-light model
6. Rationalising operational costs
The results of the above initiatives allowed the Company to report profits during thelast quarter of FY 2016-17 on a consolidated and standalone basis and for the full year FY2106-17 on a standalone basis.
The global economic scenario in first half of 2016 continued to witness volatilityowing to widespread concern over China's growth as well as uncertainty posed out of Brexitand US Presidential Elections. However the second half was stable aided by a recovery incommodity prices and increased global trade. While underlying demand trends areencouraging tightening rates in US and possible end of accommodative monetary policy inother developed countries could impact emerging economies. The global oil prices continuedto remain lower and ended 2016 at US$53. This was largely influenced by co-operationbetween OPEC (Organisation of Petroleum Exporting Countries) in the late 2016. During thenext year both the global production and consumption are expected to increase butconsumption will outpace the supply owing to strong demand growth across key markets likeChina and India. India has now become a major force in driving global oil demand with5.2% annual growth. The country's Oil & Gas appetite is enormous. However greaterefforts are needed to encourage exploration in India by global and domestic explorersalike. The Government of India has targeted a 10% reduction in India's imports of oil& gas by 2022 through introduction of several reforms and policies aimed at attractinginvestment and boosting production. Our country has only 7 of the 26 sedimentary basinscurrently producing oil & gas reflecting the enormous unexplored opportunity.
Our preparedness for the near term
We have a vast opportunity in place owing to Government's impetus towards reducing oilimports. There would be an increased E&P activity within the country through NationalSeismic Programme. We are prepared to leverage the underlying demand and secure additionalordeRs.We will also continue to pursue oilfield O&M opportunities and explore newbusiness areas. We have already established our project credentials in the North EastIndia and look forward towards pursuing market leadership in that region. We will continueto stay competitive through innovation and technology adding value to our customeRs.
The Company has always had a strong belief in their human resources. They are one mostvaluable asset and responsible for achieving and accomplishing the expectations of ourstakeholdeRs.Asian is fortunate to have a dedicated team who are passionate about theirwork and the company ensures that it continues to nurture them by providing them a goodworking environment with equal emphasis on employee welfare and employee relationinitiatives.
Your Company has established itself as a valuable and responsible corporate citizen andremains committed for the inclusive growth of society and community. Most of our projectsare in the rural and backward regions. We employ people from the local community thusaiding in their socioeconomic improvement. Through our community welfare initiatives weremain committed to the socio-economic welfare of the our project areas.
I am pretty convinced about our growth trajectory. With the support of ourstakeholders we will be able to address the underlying business challenges and move aheadwith greater strength to create sustained value for our shareholders society and ourNation. I would like to place on record my sincere appreciation to the Board of Directorsand the Management Team for their continued guidance. I would also like to express mygratitude to all our employees customers bankers and other stakeholders for theircontinued support patronage trust and confidence. The business is turning around andwill soon unleash the full potential of our organisation and lead it to greater heights.