|Shareholders submitted questions in advance of the AGM, and the answers were provided by Nordic on the SGX website today. Here's a selection from the Q&A:|
Q: With the circuit breaker in place in Singapore for last few weeks and being extended to 1 June 2020, how has/will the business which is dependent on foreign workers in Singapore be affected?
A: Mr Chang Yeh Hong stated that the extension of the CB to 1 June 2020 has certainly affected the Company and its work force and provided a breakdown of the Company’s work force of 1,283 comprising the following:
When: 27 April 2020
|• 204 locals
• 954 work permit holders (living in the dormitories)
• 113 “S” pass holders
• 12 employment pass holders
He stated that approximately 84% of the work force was affected by the CB and management was at present time, fighting very hard to justify that some of these workers were providing essential services to large corporations and government installations - and for them to resume work at the work sites.
Only a very small percentage of these workers are allowed to work at the plants currently.
Mr Chang Yeh Hong stated that fortunately, the Company would be receiving some subsidies from the Singapore Government’s Job Support Scheme and waivers on foreign workers’ levies.
|Q: Has the recent severe crash in oil price cause some cancellations of customers orders for Nordic Group?
A: Mr Chang Yeh Hong informed the meeting that as of current date, the Company has not received cancellation from any of its customers who have placed orders and for most of these capital projects that the Company was pursuing, management has not received any formal notices of cancellation but management expects these projects would be delayed.
He added that those projects that the Company was pursuing were at the technical discussion stage and management have not proceeded with commercial discussions.
Q: How do management view the oil price crash on Nordic Group's business and cash flow in the near future?
A: Mr Chang Yeh Hong informed that the Company has moved away most of its business from upstream to downstream which helped to cushion the Company from the severe drop in oil price.
As more than 50% of the Company’s sales/revenue was from maintenance jobs, overall the current drop in oil price has a lesser impact on the downstream business.
He added that as long as the Company has conversion jobs and recurring maintenance jobs, its cash flow would be quite stable.
Q: Does the drop in oil price have any impact on the Project segment?
A: Mr Chang Yeh Hong stated that due to the drop in oil price, projects would be delayed. As most companies have already allocated budgets for these projects, he believed that most of these projects would be delayed and unlikely to be cancelled.
Q: What is the status of the tender for the multi-year contract in Chemical and Refining Integrated Singapore Project (CRISP)? Has Nordic Group managed to win any contracts?
A: Mr Chang Yeh Hong informed that the preliminary CRISP project has already started but suspended after until 1 June 2020 assuming the extended CB measures were lifted.
The main CRISP greenfield project has been delayed due to the COVID-19 situation.
|Q: What percentage of the order book would likely be cancelled due to this crisis?
A: Mr Chang Yeh Hong shared that as at 31 December 2019, the Group has an order book of approximately S$92m and added another approximately S$30m subsequently.
With runoffs of approximately S$21m in Q1 FY2020, he stated that the Group still has a healthy outstanding order book of approximately S$98m.
Mr Chang Yeh Hong informed that the Company has not received any cancellation of orders to-date.