On December 17, 2009, Japan Drilling Co., Ltd.(JDC) was listed on the first section of the Tokyo Stock Exchange, thereby enabling us to embark on a new journey as a listed company.
Looking back over the last year since our listing, I am truly grateful for the abundance of support that we have received from all of our shareholders and other stakeholders.
Consolidated Financial Results for the six months ended September 30, 2010
The six months ended September 30, 2010 (April 1, 2010-September 30, 2010) saw early trends toward recovery in the offshore drilling rig market. From June 2010, however, that upward momentum began to reverse after the Gulf of Mexico Oil Spill, in the wake of the April 20 Deepwater Horizon rig incident, which led to a US government moratorium in latter May suspending new deepwater drilling operations.
Despite such conditions facing the market, JDC Group rigs continued optimal operations overall, and during the six months ended September 30, 2010, JDC-owned five rigs were operating at an average 92.7% rig utilization. These operations resulted in net sales of ¥14,253 million for the six-month period (down 26.4% year-on-year), ordinary income of ¥4,432 million (down 45.7% year-on-year), and net income of ¥3,504 million (down 39.8% year-on-year). This is mainly due to the result of declining rig utilization in comparison to the 100% rig utilization recorded for the same period of the last fiscal year ended March 31, 2010.
The scale of the Gulf of Mexico Oil Spill was unprecedented, and an official declaration of the permanent sealing of the well was not issued until September 19, 2010, five months after the initial disaster. Despite the grave nature of this incident, none of the operations of JDC Group were directly impacted by this unfortunate event. That said, however, following the US government's lifting of its moratorium on October 12, it announced new safety management rules pertaining to deepwater drilling and is tightening regulation. Although the new rules apply only to operations within the US, there may be some impact on other offshore sites, and therefore, we would like to continue keep a close eye on such developments. In that regard, JDC's Health, Safety, Quality and Environmental (HSQE) Management System, which we have been implementing since 2008, mirrors the content of the Safety and Environmental Management System (SEMS) that the new US government rules stipulate must be drafted and implemented to reduce the potential for human and organizational error.
In regard to global trends concerning petroleum and natural gas, the International Energy Agency (IEA) and other specialized organizations predict that such demand will continue to be driven by growing needs of China and other Asian countries, which is thereby likely to spur exploration and development activities of petroleum and natural gas exploration companies. Given this outlook, and because the entire JDC Group stands committed to redoubling our efforts toward making our corporate group even more appealing to shareholders, we plan to further expand business operations globally, and enhance corporate value, by strengthening our fleet of offshore drilling rigs in a manner that better addresses the diverse needs of our customers.
Going forward, we sincerely appreciate the continued support of all JDC shareholders and other stakeholders.
President and Representative Director