2015/2016 ANNUAL REPORT
19
1.
What are Management’s immediate tasks to grow SSC? When you were appointed CEO
last year, a statement was released that you expect SSC to double its fleet in 3 years. Is
it still plausible given there are no new acquisitions this year?
Shareholders must be cognisant that while there is the willingness to achieve the target, we
will only pursue opportunities with a suitable level of returns on investments and can meet our
investment criteria. We need to be certain of good cash flow and sustainability of the profits to
the shareholders.
Our immediate focus is to seek out distressed ship assets, and well-run ship management
companies which could value add to the Group’s business. Besides asset acquisitions, we
seek to grow our human capital assets, to widen the current talent pool and hone their skills.
2.
Given the downward spiral on the agency/logistics segment, what are Management’s
plans to stem the deterioration of earnings?
It will not be easy to stem the deterioration of earnings given the industry wide situation. Our
agency and logistics segment are no exception. Nevertheless, the Group has had some
measure of success winning new accounts to provide agency services to Chinese off-shore
vessel activities. At the same time, the Group is actively scouring potential targets of acquisition
in ancillary service providers.
3.
How are you managing the Group’s free cash? Will you look at returning the cash to
shareholders via higher dividend distributions?
We are keeping our powder dry.
Given that the global ship-owning segment is in disarray, opportunities may present themselves
and the Group, with its readily available cash reserves, will then be in a position to avail itself
of these opportunities.
Shareholders must be cognisant that there is a need to strike a balance between dividends
and retaining profits during a downturn, so that management will not lose the nimbleness and
flexibility to act swiftly in seizing acquisition opportunities in a timely manner. Looking at the
example of Capricornus Leader last year, if the Group did not have sufficient cash at that point
of time, we would not have been able to act fast enough to acquire the vessel.
4.
Will you consider a rights issue given that your shareholders are willing to plough in
money for expansion plans as mentioned at the previous AGM?
A rights issue is an option available to the Group, provided there are compelling reasons for the
Company to undertake the exercise and it is in the interest of the Company to do so.
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