I would like to express our sincere appreciation to all our shareholders and other stakeholders for the continuing support and understanding for JDC Group.
Consolidated Results for the Fiscal Year Ended March 31st, 2012
Global average offshore drilling rig utilization rose to 79.2% in the fiscal year from 75.4% marked in the previous fiscal year. Newly–built rigs entered into the market during the fiscal year, which increased the total supply of available offshore drilling rigs for operation. On the other hand, despite the instability of sustainable crude oil supply caused by the political uncertainty in the Middle East, as a result, market demand for offshore drilling rigs became stronger compared to a year ago.
Reflecting such market environment, the Group's rigs continued to operate steadily, and five rigs owned by JDC subsidiaries achieved an average rig utilization of 99.8% (up 5.7% year-on-year).
The Group was therefore able to record consolidated sales of ¥29,294 million (up 3.5% year-on-year) during the fiscal year mainly by the increased number of rig operating days. On the other hand, the Group's consolidated ordinary income was ¥6,222 million (down 14.0% year-on-year) and consolidated net income was ¥3,469 million (down 38.1% year-on-year). These declines are attributable to foreign exchange losses and reduction in gain on equity in income of affiliated companies.
Future Business Environment and Management Policy
The supply of crude oil is forecast to remain tight in the medium and long-term projections, deriving from strong demand in emerging countries, and concerns about uncertain political situation in the Middle East.
The market demand for offshore drilling rigs has considerably improved after a stagnant period resulted from the oil spill incident in the Gulf of Mexico. Vigorous exploration activities are underway in the deep waters of Brazil, West Africa, and other regions. For this reason, it is very likely that offshore drilling rig utilization outlook will remain robust.
The Group, with such market outlook, will endeavor in "stable and safer operations" and "strengthening corporate management", two basic priority issues of the organization. The Group is then committed to work to pursuit its growth strategy to promote further company prosperity.
This growth strategy includes three targets, "enhancing offshore rig fleet", "full-scale entry into the deepwater market", and "expanding business scope through the application of offshore drilling technology (including Methane Hydrate R&D project)". The Group's major current activities such as construction of a new jack-up rig HAKURYU-11, upgrading/life-extension works of NAGA 1, and commercial purpose operation of the deep-sea drilling vessel Chikyu are all in line with realizing this strategy. The Group will strive to expand the scale of its business by continuing to harmonize marketing activities, engineering, and its financing capability.
Earnings Projections for the Fiscal Year Ending March 31st, 2013 and Beyond
A decline in both net sales and income for the fiscal year ending March 31st, 2013 is anticipated due to reduced rig operating days caused by shipyard work of SAGADRIL-1 and NAGA 1. Expiry of contract for HAKURYU-10 at Mediterranean Sea and shifting its operating area to Indonesian waters will also affect on this fiscal year's earnings forecast. We therefore assume this to be a year of patience and endurance. However, for the fiscal year ending March 31st, 2014 and beyond, a new multi-year contract for HAKURYU-10 will be fully counted throughout the term, and our rig fleet will be fortified with additions of four new jack-up offshore drilling rigs under construction in Singapore including HAKURYU-11 and three others by the Qatari joint-venture company. All of which will certainly make considerable contribution to Group's earnings.
The Group is striving to achieve a consistent growth in future earnings and a sustainable increase in corporate value by steadily moving ahead with a long-term growth strategy, and I am positive that the Group will unite behind these objectives.
It is our sincere hope that we will receive the continued understanding and support from all our shareholders and other stakeholders.
President and Representative Director