EMS Energy : Press Release

PRESS RELEASE

EMS Energy 1H2014 Revenue Soars Over Seven-Fold to S$28.52M On Progress Recognition of Major Derrick Equipment Set Project; Gross Profit Margin Up Sharply To 20.1%

S$'000	1H2014	1H2013	Change (%)
Revenue	28,521	3,791	652.3
Gross Profit	5,745	101	5,587.1
Gross Profit Margin	20.1%	2.7%	17.4 pt
Net Profit attributable to equity holders of the Company	2,026	4,015	(49.6)
Fully Diluted Earnings per share (cents) 1	0.27	0.50 3	(46.0)
	30/6/2014	31/12/2013	Change (%)
Net asset value per share (cents) 2	3.22	2.93	9.9

1 The fully diluted earnings per ordinary share for the financial period under review is calculated based on the weighted average of 741,000,956 (1H2013:

615,354,802) ordinary shares in issue.

2 Net asset value per share is calculated based on 740,354,802 shares for both financial periods ended 30.06.2014 and 31.12.2013.

3 The restated earnings from continuing operations based on weighted average number of ordinary share in issue and on a fully d iluted basis had increased to

0.50 cents compared to 0.49 cents previously stated due to the increase in net profit of the Group resulted from the classification of the S$112,000 share issue expenses to be deducted against share capital as opposed to the previous treatment of charging it to the profit or loss.

Singapore, 11 August 2014 - EMS Energy Limited ("EMS" or the "Group) announced today that its revenue for the half- year ended 30 June 2014 ("1H2014") soared 652.3% to S$28.52 million compared to S$3.79 million in the equivalent period a year ago ("1H2013") due to increased contributions from projects won in the last 12 months, including a Derrick Equipment Set ("DES") project worth US$36 million secured in September 2013.

In tandem with the top line growth, the SGX Catalist-listed provider of engineering solutions, customized equipment and contract manufacturing and packaging solutions said 1H2014 gross profit rose sharply to S$5.75 million compared to S$0.10 million in 1H2013, lifting gross profit margins to 20.1% from 2.7% over the comparative periods.
In line with the revenue and margin-accretive strategic thrusts unveiled last November - to boost business development, expand capabilities and marketing network and drive greater internal efficiencies - the Group's expenses as a percentage of revenue decreased significantly to 15.5% from 113.4% over the comparative periods.
In the absence of an approximately S$7.1 million one-time gain on disposal of a subsidiary and a foreign exchange gain of S$80,000 in 1H2013, the Group recorded comparatively lower other income of S$57,000 in 1H2014 compared to S$7.41 million a year earlier. As a result of the above factors, EMS achieved net profit attributable to equity holders of the Company of S$2.03 million in 1H2014 compared to S$4.02 million in 1H2013.
Earnings per share on a fully diluted basis declined to 0.27 Singapore cent in 1H2014 compared to the restated 0.50
Singapore cent in 1H20133. Net asset value per share rose to 3.22 Singapore cents as at 30 June 2014 compared to
2.93 Singapore cents as at 31 December 2013.
As part of its strategy to increase capabilities and capacity so as to take on larger higher-value and higher-profit projects, EMS announced on 20 February 2014 that will build a waterfront facility on a 250,130 square foot land parcel in Tuas. It will house previously outsourced services such as painting and blasting under one roof - raising operational efficiency as well as EMS' ability to offer a comprehensive suite of end-to-end solutions.
The Group has appointed Ascentor Resources LLP as project consultant, and tenders for construction are expected to conclude by the end of August 2014. EMS said that construction is slated to commence in 3Q2014 instead of 1H2014 announced previously due to delays in the tender process. EMS expects to transfer operations in phases to the new waterfront facility - which is five times larger - with the entire relocation expected to complete by 1H2016.
In May 2014 EMS proposed a one-for-one rights issue at an issue price of S$0.02 per share to raise net proceeds of
S$14.7 million for the development of its new waterfront facility - estimated to cost about S$23.6 million - and to finance

its order book. The proposed rights issue is expected to complete between the end of 3Q2014 to the beginning of
4Q2014 and announcements will be made when there are material updates.
Executive Chairman and Chief Executive Officer of EMS, Mr. Ting Teck Jin, said: "The DES project has been progressing on track, and will contribute to our track record for delivering such large-scale projects. We remain committed to the roadmap to growth announced last year to continue driving greater internal efficiencies and top line growth. The proposed rights issue will strengthen our balance sheet in order to fund the construction of our waterfront facility and allow us to pursue larger projects."
EMS is currently in talks to secure two more repeat DES contracts from its parent company, Koastal Group, and a third DES contract from a third-party, each worth about US$36 million, by the end of the year. The Group's order book to-date stood at approximately S$29 million as at 30 June 2014, excluding the three potential orders.
Barring any unforeseen circumstances, and in view of the potential positive contribution to the revenue of the Group from the three pipeline projects, EMS expects its operational performance in FY2014 to exceed that of FY2013 and to achieve greater margin efficiency by FY2016 upon the completion of its waterfront facility.

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About EMS Energy Limited

Listed in 2003, EMS Energy Limited is an established provider of engineering solutions for the marine, oil and gas industries. Established in 1977, EMS Energy designs, manufactures and installs engineering solutions and products such as drilling and well intervention systems, deck machineries, offshore cranes, and other mechanical load handling systems. In addition, it also offers its customers' aftermarket services such as commissioning, inspection, training, conversion, retrofitting, maintenance, repair and overhaul as well as spare parts procurement. With its track record, experience and expertise along with certifications from the American Petroleum Institute, EMS Energy serves customers across China, Europe, India, Indonesia, Malaysia, Russia, Singapore, South Africa, Thailand, United Arab Emirates, United States, and Vietnam.
More information on EMS Energy is available at www.emsenergy.com.sg

This press release has been prepared by the Company and its contents have been reviewed by the Company's sponsor, PrimePartners Corporate Finance Pte. Ltd. (the "Sponsor") for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the "SGX-ST"). The Sponsor has not independently verified the contents of this press release.

This press release has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this press release, including the correctness of any of the statements or opinions made or reports contained in this press release.

The contact person for the Sponsor is Mr Mark Liew, Managing Director, Corporate Finance, at 20 Cecil Street, #21-02 Equity Plaza, Singapore 049705, telephone [phone].

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