Chairman's Statement

Chairman's Message

Dear Shareholders,

On behalf of the Board of Directors of Kim Heng Ltd. (“Kim Heng”) and its subsidiaries (the “Group”), I am pleased to present our Annual Report for the financial year ended 31 December 2024 (“FY2024”).

A Remarkable Decade

2024 marks a significant milestone—our 10th anniversary as a listed company on the Singapore Exchange. Over the past decade, we have weathered many challenges and global uncertainties. In the wake of the oil price downturn in 2015, our revenue declined, reaching a low of S$27 million in FY2017. The management remained steadfast and focused on strengthening our capabilities to navigate the challenging oil and gas industry. We stayed defensive to preserve our cash reserves and invested prudently. During the downturn, the company used its IPO proceeds to buy distressed vessels at a significant discount.

In 2017, we acquired our first three Anchor Handling Tug Supply (AHTS) vessels, marking our entry into vessel ownership and operations. This strategic move proved timely, as our revenue rebounded to S$58 million in 2019 and laying a solid foundation for the future.

With the weak oil price in 2018, we accelerated our diversification strategy, expanding into the offshore wind renewable energy sector by leveraging from our knowledge and skillsets from the traditional oil and gas industry. We remained resilient during the global COVID-19 pandemic in 2020, with its unprecedented impact, including negative oil prices. We continued to grow by entering the Taiwanese market and strengthening our fleet of vessels to support the offshore wind and marine infrastructure projects. Our expansion into offshore renewables and marine infrastructure, resulted in revenue rising to S$63 million in FY2021. Emerging stronger from the pandemic, our management has continued to drive revenue growth to S$123 million in FY2024. This demonstrated a strong track record of implementing diverse strategies to adapt, reshape our business, and consistently deliver results over the past 10 years as a publicly listed company.

Stable Financial Performance

In FY2024, the Group’s revenue grew by 21.3% year-on-year to S$122.7 million, primarily driven by an increase of S$21.3 million from vessel sales and newbuilds, and S$10.8 million from vessel chartering and towage. This was partially offset by declines in marine offshore support services and equipment rental. The cost of sales rose by 34.1% to S$91.7 million, resulting in a gross profit of S$31.0 million which is a 5.4% decline from FY2023.

Despite increases in distribution, administrative, and finance expenses, we benefited from lower other operating and income tax expenses. Consequently, the Group achieved a net profit after tax of S$2.5 million, compared to S$2.3 million in FY2023.

As at 31 December 2024, the Group recorded net current liabilities. In view of our working capital needs and expansion plans, the Board is not recommending a dividend for FY2024. Nonetheless, we remain confident in our ability to meet financial obligations, supported by our ability to realise property, plant, equipment, and inventories where necessary.

Laying the Foundation for Future Growth

Amid a challenging global business environment, we continue to take strategic steps to drive long-term growth.

In August 2024, our wholly owned subsidiary, Kim Heng Offshore & Marine Pte. Ltd., entered into an agreement to acquire the remaining 49% stake in Bridgewater Offshore Pte. Ltd. (“BWOPL”) from Phillip Enterprise Fund Limited and Phillip Ventures Enterprise Fund 5 Ltd., for approximately US$5.1 million (S$6.9 million). This acquisition allows full consolidation of BWOPL and its fleet into our chartering segment, enhancing our operational capacity and financial strength.

In December 2024, another subsidiary, Adira Renewables Pte. Ltd. (“ARPL”), entered into a joint venture with Soiltech Engineering Co. Ltd. and Moon International Co., Ltd. to incorporate a joint venture company, Soiltech Adira Korea Co., Ltd., in which ARPL holds a 49% stake. This venture extends our presence in Asia’s offshore wind sector, particularly in geotechnical survey services, and furthers our transition into renewables.

Leadership Updates

We are pleased to welcome Mr. Chia Jackson as an Independent Director, effective 1 January 2025. Mr. Chia brings a wealth of experience from the Republic of Singapore Navy and senior roles at SBS Transit and ComfortDelGro. His insights in marine and transport will be an asset to our Board.

Additionally, Mr. Chen Pengyao, Rex has been promoted to Chief Operating Officer, effective 1 January 2025. In this new role, he will oversee our key business segments— Oilfield Services, Adira Renewables, Marine Construction as well as Ship Repair & Engineering to drive operational excellence across the Group.

Looking Ahead to Scale New Heights

As we reflect on our achievements to navigate forward, we remain committed to scaling new heights driven by experience, and a bold vision for sustainable growth in the evolving offshore renewable energy sectors.

A more turbulent world in 2025, due to geopolitical tensions, shifting policies, and supply chain disruptions, we position ourselves to seize new opportunities. These include emerging trends in submarine fibre optic and power cable laying. With the growing demand for offshore marine services in Asia, we are charting a bold course toward new frontiers to specialise our vessel fleet to meet the business requirements.

Appreciation

In closing, I would like to express my deepest appreciation to our shareholders, partners, clients, and staff. Your unwavering support and commitment have helped us achieve three consecutive profitable years. Let us continue to build on this momentum for a brighter, sustainable future.

Warm regards,

Thomas Tan Keng Siong
Executive Chairman & Chief Executive Officer