Jutal Offshore Oil Services Limited announces its 2014 annual results on 31 March 2015 at Hong Kong.

Jutal achieved total revenue of RMB950,881,000 in year 2014, increased by 6.86% compared with RMB889,827,000 in year 2013. The gross profit and net profit were RMB186,177,000 and RMB28,456,000 respectively, decreased 16.65% and 46.86% compared with that in year 2013. Basic earnings per share is RMB0.037. The decrease in profit for the year 2014 was mainly due to (i) reduction in gross profit due to gross margin decline caused by extension of construction period of certain large projects; and (ii) decline of share of profit from the associate company -- Penglai Jutal Offshore Engineering Heavy Industry Co., Ltd. because of the reduction of overall workload in 2014 than that in 2013 due to delay of some large projects.

The Board also announced a final dividend of HK$ 0.01 per each ordinary share.

Since the second half and, particularly, the fourth quarter of year 2014, international oil price has plummeted and the overall operating environment of the oil and gas industry has changed drastically. Against this backdrop, we have made every effort to ensure the smooth implementation of our ongoing projects while boosting our marketing. As such, revenue from each of our business segments increased and our major large-scale projects commissioned by several key customers were progressing smoothly during the year.

The third phase of our Zhuhai site was completed and put into use in the first half of 2014 and has carried out a FPSO topside project commissioned by one of our strategic customers. This project was also completed and delivered during the year and our quality control and safety management fulfilled the customer's requirement and were highly praised. The contract with another strategic customer to fabricate subsea equipment for a deep water natural gas field in Australia was also substantially completed and is currently undergoing the final commissioning stage. Delivery is expected in early of year 2015. This customer also gave us quality and safety awards and has entered into a long-term global partnership agreement with us, paving the way for further future cooperation in subsea equipment fabrication. Furthermore, after 2 years of progress, the project to fabricate subsea equipment for the deep water gas field in South China Sea was also delivered. We have also successfully completed a large-scale South China Sea oil and gas field renovation project which involved a total of 4 large facilities, namely 3 drilling platforms and 1 FPSO, of which 2 drilling platforms were the largest of its kind in Asia. This project is large in workload and difficult to implement, and involves the collaboration of a number of professional areas and all the production process on a platform. The successful implementation of the project was monumental and signified the client's recognition of our fabrication technique, quality control and assurance, technical capability and project management.

In year 2014, we have also undertaken a series of supply and processing equipment projects ranging from oil and gas field equipment to oil and gas processing plants home and abroad, thereby achieving new breakthrough in terms of natural gas processing and water treatment equipment in the offshore oil market.

Notwithstanding some impact from the overall market environment, the provision of technical supporting services for oil and gas industry business maintained stable operation and recorded satisfactory performance in year 2014 through our marketing effort and internal management improvement. We have made new progresses in both conventional and unconventional businesses with new clients and new services in these markets, thus enhanced our competitiveness. Our new diving services business has completed initial establishment and will penetrate the key offshore oil field market in South China Sea. It has already accomplished several projects with outstanding results.

Our associate, Penglai Jutal Offshore Engineering Heavy Industries Co. Ltd. ("Penglai Jutal"), undertook the fabrication project of 3 trains of pipe rack modules for the LNG project in Yamal, Russiaas announced by the Company on 27 August 2014. This project represented the largest overseas fabrication order of Penglai Jutal as of the date hereof. However, its net profit for the year was affected by the later-than-expected conclusion of this order as the overall workload for year 2014 has been decreased. Nevertheless , Penglai Jutal has sufficient ongoing order s that have laid the solid foundation for its production and operation in the next 2 years.

As the international oil price is expected to stay low for a certain period of time, the global oil and natural gas development and engineering and servicing industries are also taking a more cautious approach towards future investment and construction. Therefore, the number of opportunities in the market is expected to be decrease d . In response to these market changes, we will take a number of initiatives in the coming year.

To effectively reduce our costs and expenditures, we have already implemented a range of measures such as redeploying and streamlining our structure and staff, slashing and strictly controlling expenses and optimizing our production and management procedures so as to improve our operating efficiency and maximize our performance.

In the coming year, we will put additional efforts into marketing by strengthening our marketing team, expanding our marketing campaign, adjusting our marketing strategy and seizing every possible market opportunity and chance.

Our strategies for the oil and gas fabrication business are to master the ability to handling turnkey oil and gas equipment contracts and the ability to fabricate large-scale modules and subsea equipment. To do so, we will further consolidate and establish our core research, development, design and management strengths.

Insisting on steady growth and innovation, we will make concerted efforts to surmount all future challenges with a proactive and self-confident manner in the coming year.

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