- Email: [email protected]
Hyflux Ltd, Singapore
COMPANY PROFILE
Hyflux Ltd, Singapore Profile
Hyflux is a Singapore-based environmental solutions company that specialises in the production of membrane systems for water treatment applications. The company is active in a range of water treatment markets including desalination, water purification and wastewater treatment for municipal and industrial clients, as well as home consumer filtration and purification products. Hyflux products and services extend from plant design and manufacture through to operation and maintenance. The company is also active in renewable resources management deploying its membrane technologies for applications such as used oil recovery and recycling. Analysis
Hyflux had a record year in fiscal 2008 with its revenue surging 187% on the year earlier to S$554.2 million and its net income 79% stronger at S$59.0 million. The sales jump was driven by the company’s Municipal segment that increased its revenue by 436% to S$476.8 million, representing 86% of the overall total. The growth in the division reflected a series of significant contracts won in China and Algeria. These included a US$500 million contract to build the world’s largest membrane-based seawater desalination plant in Magtaa, Algeria, with a capacity of 500 000 m3/day, which was awarded in April 2008. This contract followed an earlier success for Hyfulx in Algeria for a 200 000 m3/day seawater desalination plant at Tlemcen. In contrast, Hyflux saw a decrease in sales in its Industrial sector where revenues fell 25% on the 2007 figure to total S$76.4 million, representing 14% of total group sales. The decline in sales in the Industrial segment was attributed to a slowdown in economic activity in China. In terms of geography, Hyflux’s sales were dominated by China (54% of the total) and the Middle East & North Africa region (40%). Hyflux’s continued growth in China saw it secure Yn945 million worth of new water and wastewater treatment projects in the Jiangsu, Shandong, Tianjin and Hebei provinces during 2008. The company also reported good growth during fiscal 2008 for long-term operations and maintenance work, adding five additional contracts during the year. In terms of backlog, the company’s order book stood at S$1.15 billion at year-end, a 34% increase from the 2007 comparator. Hyflux’s costs and expenses rose significantly during 2008 as a result of the higher sales activity. Raw materials and consumables expenses increased 262% on the year earlier figure to S$387.8 million, while personnel expenses were 55% higher at S$52.6 million. Finance costs were up 15% to S$10.2 million, while other operating expenses increased 223% to S$30.4 million.
COMMENT Hyflux will celebrate its 20th anniversary in fiscal 2009 confident of its future prospects. During its first two decades Hyflux has grown from a firm of three people in Singapore to a company of close to 1900 employees across the world. Moving forward, Hyflux remains focused on continuing to develop its in-house expertise in membrane technology and on growing its presence in key emerging geographical markets such as China, North Africa and India. The company has benefited recently from government stimulus packages in China and Algeria to resolve severe water shortages and is confident that it will continue to see strong growth in its Municipal segment. The company has been one of the pioneers in China’s water sector, entering the market in 1994. Consequently, it now has an entrenched presence in the market where it employs more than 1000 people and has not only a sales and marketing network, but also both manufacturing and R&D facilities. As a result, Hyflux now has more than 40 water and wastewater treatment, water recycling and desalination plants in 26 provinces in China. In addition to its strong footprint in China and Algeria, Hyflux is also looking towards India as a growth market, particularly for seawater desalination and water treatment. It made its first foray into the Indian market in 2006 and reports steady progress in the subsequent years. ■
Key Figures (S$ million) Hyflux Ltd
Year ended 31.12 2008
2007
2006
2005
2004
Revenue Of Which: Municipal Industrial
554.2
192.8
142.4
131.5
88.7
476.8 76.4
89.0 102.4
45.3 90.1
74.2 56.6
16.6 64.9
Cost of Raw Materials & Consumables
387.8
107.2
77.7
69.4
35.9
Personnel Expenses
52.6
33.9
20.0
16.7
9.3
Profit before Tax
70.4
38.7
20.2
50.4
28.8
Profit after Tax
62.2
36.6
15.4
49.3
27.9
Profit after Tax and Minority Interests
59.0
32.9
15.5
46.4
26.1
Contact Details
President and CEO: Address:
8
Filtration Industry Analyst
Olivia Lum Hyflux Building 202 Kallang Bahru Singapore 339339
Tel: +65 6214 0777 Fax: +65 6214 1211 Email: [email protected] Web: www.hyflux.com
July 2009
Hyflux Ltd, Singapore Profile
Hyflux is a Singapore-based environmental solutions company that specialises in the production of membrane systems for water treatment applications. The company is active in a range of water treatment markets including desalination, water purification and wastewater treatment for municipal and industrial clients, as well as home consumer filtration and purification products. Hyflux products and services extend from plant design and manufacture through to operation and maintenance. The company is also active in renewable resources management deploying its membrane technologies for applications such as used oil recovery and recycling. Analysis
Hyflux had a record year in fiscal 2008 with its revenue surging 187% on the year earlier to S$554.2 million and its net income 79% stronger at S$59.0 million. The sales jump was driven by the company’s Municipal segment that increased its revenue by 436% to S$476.8 million, representing 86% of the overall total. The growth in the division reflected a series of significant contracts won in China and Algeria. These included a US$500 million contract to build the world’s largest membrane-based seawater desalination plant in Magtaa, Algeria, with a capacity of 500 000 m3/day, which was awarded in April 2008. This contract followed an earlier success for Hyfulx in Algeria for a 200 000 m3/day seawater desalination plant at Tlemcen. In contrast, Hyflux saw a decrease in sales in its Industrial sector where revenues fell 25% on the 2007 figure to total S$76.4 million, representing 14% of total group sales. The decline in sales in the Industrial segment was attributed to a slowdown in economic activity in China. In terms of geography, Hyflux’s sales were dominated by China (54% of the total) and the Middle East & North Africa region (40%). Hyflux’s continued growth in China saw it secure Yn945 million worth of new water and wastewater treatment projects in the Jiangsu, Shandong, Tianjin and Hebei provinces during 2008. The company also reported good growth during fiscal 2008 for long-term operations and maintenance work, adding five additional contracts during the year. In terms of backlog, the company’s order book stood at S$1.15 billion at year-end, a 34% increase from the 2007 comparator. Hyflux’s costs and expenses rose significantly during 2008 as a result of the higher sales activity. Raw materials and consumables expenses increased 262% on the year earlier figure to S$387.8 million, while personnel expenses were 55% higher at S$52.6 million. Finance costs were up 15% to S$10.2 million, while other operating expenses increased 223% to S$30.4 million.
COMMENT Hyflux will celebrate its 20th anniversary in fiscal 2009 confident of its future prospects. During its first two decades Hyflux has grown from a firm of three people in Singapore to a company of close to 1900 employees across the world. Moving forward, Hyflux remains focused on continuing to develop its in-house expertise in membrane technology and on growing its presence in key emerging geographical markets such as China, North Africa and India. The company has benefited recently from government stimulus packages in China and Algeria to resolve severe water shortages and is confident that it will continue to see strong growth in its Municipal segment. The company has been one of the pioneers in China’s water sector, entering the market in 1994. Consequently, it now has an entrenched presence in the market where it employs more than 1000 people and has not only a sales and marketing network, but also both manufacturing and R&D facilities. As a result, Hyflux now has more than 40 water and wastewater treatment, water recycling and desalination plants in 26 provinces in China. In addition to its strong footprint in China and Algeria, Hyflux is also looking towards India as a growth market, particularly for seawater desalination and water treatment. It made its first foray into the Indian market in 2006 and reports steady progress in the subsequent years. ■
Key Figures (S$ million) Hyflux Ltd
Year ended 31.12 2008
2007
2006
2005
2004
Revenue Of Which: Municipal Industrial
554.2
192.8
142.4
131.5
88.7
476.8 76.4
89.0 102.4
45.3 90.1
74.2 56.6
16.6 64.9
Cost of Raw Materials & Consumables
387.8
107.2
77.7
69.4
35.9
Personnel Expenses
52.6
33.9
20.0
16.7
9.3
Profit before Tax
70.4
38.7
20.2
50.4
28.8
Profit after Tax
62.2
36.6
15.4
49.3
27.9
Profit after Tax and Minority Interests
59.0
32.9
15.5
46.4
26.1
Contact Details
President and CEO: Address:
8
Filtration Industry Analyst
Olivia Lum Hyflux Building 202 Kallang Bahru Singapore 339339
Tel: +65 6214 0777 Fax: +65 6214 1211 Email: [email protected] Web: www.hyflux.com
July 2009