I, first of all, would like to express my sincere gratitude for your support and understanding of our Group.
Consolidated Financial Results for the Six Months Ended September 30th, 2012
During the first half of the fiscal year, (April 1st-September 30th, 2012), global average offshore drilling rig utilization rose to 82.4% compared to 77.8% recorded for the same half-year period in the last fiscal year.
In this market environment, JDC Group's rigs continued to operate as planned at the beginning of the fiscal year. Five rigs owned by JDC subsidiaries achieved an average rig utilization of 96.4% compared to 100.0% recorded for the same half-year period of the last fiscal year.
Consolidated earnings for these six months were affected by factors such as reduced rig operating days caused by shipyard work on SAGADRIL-1 and NAGA 1, relocation of HAKURYU-10 from the Mediterranean to Indonesian upon expiry of the contract, and a decline in the dayrates for some rigs compared with the same period last fiscal year.
In this business environment, net sales for the first half of the fiscal year amounted to ¥ 9,371 million (down 44.6% year-on-year). JDC Group posted an operating loss of ¥ 836 million, with an ordinary loss of ¥ 883 million and net loss of ¥ 757 million.
However, the bright side aspect is that all the aforementioned rigs have now returned to full operational mode for enabling us to catch up in the second half of this fiscal year to make our full fiscal year financial outlook more profitable.
Future Business Environment and Management Policy
A steady increase trend in both rig utilization and dayrates for offshore drilling rigs are observed in the market. Demand for deepwater rigs is particularly strong and is driving forward the offshore drilling market as a whole.
With due consideration of this business environment, JDC Group is determined to realize the following growth strategy: to strengthen its future growth commitment by enhancing its offshore rig fleet, to promote its full-scale entry into the deepwater market, and to expand business scope through the application of offshore drilling technology (including the national Methane Hydrate R&D project).
From early May 2012, we undertook an upgrade and refurbishment of NAGA 1 at the Aichi Works of the IHI Corporation. This intensive work was successfully brought to conclusion in late October this year. Upon completion of shipyard work, NAGA 1 has made her return to Malaysia, and recommencement of her operation is under preparation.
Meanwhile, four new premium class jack-up rigs, i.e. HAKURYU-11 and three others of our Qatari joint-venture company are now under construction in Singapore. Once commissioned, they are certain to make a considerable contribution to Group's future earnings.
In its deepwater drilling operations, JDC Group has successfully garnered three drilling contracts for commercial purposes for The Deep-Sea Drilling Vessel CHIKYU starting sequentially from January 2013. The world's first methane hydrate production test in the eastern Nankai Trough off Japan will be the first of such three commercial drilling operations by CHIKYU.
JDC Group will continue its efforts towards sustainable growth. Standing firmly in this growth orientated stance, we define this fiscal year as a "year of preparation" for a leap forward starting from the next fiscal year.
We appreciate your continued support.
President and Representative Director