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[Interpreted] Dear investor friend. Good afternoon. Thank you for joining this briefing for the announcement of COSL's 2021 Third Quarter Results. First of all, I would like to introduce you to the company's management here. We have Chong Xiaojie, Chief Financial Officer. Our results presentation will be conducted in English. Ms. Chong Xiaojie will walk you through the operational review for third quarter 2021. After that, we will open the floor for questions.
Now I will turn the call over to Ms. Chong. Ms. Chong, please.
[Interpreted] Dear friends, good afternoon, everyone. I'm Chong Xiaojie, CFO of COSL. Welcome to the 2021 third quarterly results conference call of COSL. We have announced our third quarter results for 2021. I will brief the company's operating performance first. And over third quarter of 2021, despite the oil price rebounding, the national oil company investment, the oil exploration and the development continued to stay ahead in the prudence. We were continually affected by COVID-19. The oil brake services market picked up slowly against the backdrop of steady growth of domestic economic and continuous promotion of regarding National Energy Secretary's Strategy.
The company further optimized production and operations and profoundly promoted cost reduction and efficiency increase to ensure smooth operations throughout the year. In the first 3 quarters of 2021, the company's operating revenue amounted to RMB [ 19.88 ] billion and the nice profit amounting to RMB 1.46 billion. In the first 3 quarters, the profitability for the Well Services segment improved. The Marine Support services operation was stable, and the workload of ocean bottom cable and ocean bottom node we were for. For the geopolitical acquisition and the [ Serving ] Services segment, the overall operation volume of Drilling Services segment declared.
The company continued to develop both domestic and overseas markets went about to make breakthroughs in key and core technologies took an important task of being the pioneer of technology development and the [indiscernible] technical support for promoting is the oil and gas exploration and development.
In the future, the company will craft the strategies on technology-driven cost leadership, integration into naturalization and the regional development. COSL program for demand, discovery system and the continuity strive to build a world-class energy service company with Chinese characteristics in our runway so as to continuously create higher value for shareholders, customers, employees and partners.
That's a brief introduction to our third quarterly results for 2021. More information has been disclosed at the Shanghai Stock Exchange and the Hong Kong Stock Exchange. Now we are coming to QA session. We welcome any questions. Thank you.
[Interpreted] Thank you, Ms. Chong. Now we will open the floor for questions. Please note that we will provide consecutive interpretation during the Q&A session. [Operator Instructions] Operator, please connect the first investor online.
Your first question comes from Albert of Morgan Stanley.
This is Albert from Morgan Stanley. I have 2 questions. First, I would like to ask, given that oil price has rebounded, both like the [ trend go ] above USD 80 now, and during the third quarter, I think we have obtained some of these new contracts overseas. In terms of the pricing, do we see some recovery trends or signs of recovery in the coming quarters? That's the first question on pricing of our drilling segments. For the second question, I'd like to ask if you can share some of the indicators for the Well Services segment to let us know how the workload for this segment has improved recently. That's the second question.
[Interpreted] So the second question will be answered by our Investor Relationship department. I will first answer the first question. The oil price, indeed, as you said, it is rebounded recently and reaching a high level. And for the well services industry, we definitely have benefited from this. And our customers have seen a rising price. They have increased their investment exploration and development of this as well. So this will also increase the price of the market, and we also have positive several overseas markets, which we have been very active with.
For example, in Norway, we recently have got some contracts. And in Middle East as well, several contracts have been won by us. And I have to say that the whole industry is also happy about the price rise. And we also have got several contracts, as I said before, but there is something that I have to press is actually for our industry, it stays a little bit behind of the price. And you can also see that for the drilling supply, it's still quite abundant globally. So even if the price rise effect that, in a short period of time, we wouldn't see a very big significant boost of the price.
[Interpreted] So actually, for the second question about the workload, we have already disclosed it in this third quarter report. For the detailed data, you can refer to the disclosure of the numbers. And then we also have answered and disclose such information in the semiannual meeting as well. And because in the first quarter, because of COVID-19 and the slow recovery of the market, there is a delay of our industry's workload, and so it's a technical part of that.
For Q2 to Q3, the workload, no matter if the year-on-year growth or we compare with the previous quarter, it definitely has seen a growth. And in the few next quarters, we will definitely focus on the prevention and control COVID-19 and increasing that in the R&D to guarantee this conversion of the technical results being converted and as we mentioned before, like the staying behind the feature of our industry and the workload in the next few quarters, we definitely will try to catch up. That will be guaranteed.
The second question comes from Mu Lei of JPMorgan.
Mu Lei from JPMorgan. I have 2 questions. The first is regarding to our utilization -- Drilling segment, utilization with recovery. So we see a moderate run rate recovery for jack-ups, but better recovery for semi-subs in 3Q compared with 2Q. So as the say of management just reiterated during the briefing, that they're going to accelerate to the settlement in second half, especially in 4Q of this year. So should we expect a similar recovery trend for the rest of this year in terms of our drilling [ refinery ]? Or should we expect to accelerate for the better run rate in the rest of this year? So this is my first question.
The second question is regarding to our cost. So we see the cost inflation of commodity and raw materials in many industries, but our cost management seems quite efficient. So should we expect a higher cost in 4Q? Or should we expect a similar effective cost control in rest of this year?
[Interpreted] So for the first question for the utilization rate of the drilling, as you said, because of the rise of the oil price, actually also arrangement of the oil company. So both for jack-ups and submersibles have been a rising trend. And despite that, indeed, we have utilized the jack-up line factor than the semi-submersive ones. And basically, they're all on the rise. It's just like slightly faster, which are compared with the semi-submersive.
[Interpreted] For the second question, as we just proposed the 5 strategies for our company and the cost, of course, is 1 of the 5 top strategies. We have utilized the cost in order to improve the quality and the profit of our company. And in the previous 3 quarters, we definitely have done this with our control and efforts.
So we have done it with several efforts from the supplier relationships. And the scale of our procurement, the sharing of resources with our partners and the leasing cost has also been redacted -- reduced. And these have all been done with the negotiation with the suppliers.
And indeed, we have to admit that the current environment is with rising costs. We are under heavy pressure on controlling the cost. So with the reinforcement of such mechanism, we definitely hope to control the cost and to ensure the structure, the construction and the system construction and the long-term construction of the cost to control mechanism. And then we also hope to optimize the structure and the level of the cost control to further guarantee our profits.
Next question comes from Si Tingting Bank of America Merrill Lynch Merian.
[Interpreted] I have 2 questions, and thank you for the management for allowing me this opportunity to ask the 2 questions. The first one is about the drilling of the overseas market. So you can see that actually the workload of the 3 semi-subs now have seen a not very good performance. And the workload is not very well, and it seems to have quite a big loss. And we wonder that maybe in this year or until the first quarter next year, you wouldn't have very big workloads. How do you hope to mitigate such loss? The second one is actually CNOOC, with the release of performance has said that in the next 5 years, it expects to have 5% to 10% of the CapEx we spend in wind, power or other clean energy. So I want to know that how much COSL could have from the 5% to 10% of the CapEx.
[Interpreted] So I would like to answer these questions. Thank you for your attention. Indeed, for the 3 semisubmersibles, indeed, we haven't got very full workload. And they are all in the condition of waiting for further instructions and drafts. And we have done 2 measures to deal with it. The first one is tighten the control of cost.
Regarding the personnel management and the repair and et cetera, and we control the expenditure of other capital and repairmen. And we also control the cost of fuel for that.
And for the exploration of new opportunities and new contracts, we also have done some efforts.
We recommended a lot of business to the potential customers to expanding our network. And by doing with more possible sales. We actually have done it in the North Sea. And we -- through our efforts, we have done 3 new agreements for this drilling submersibles. And the earliest contract would start to launch in early days of December this year. So we expect actually for next year, the workload for the 3 semi-subs would be very full. And you can see that, thanks to the third quarter's efforts, we have seen great effect, both regarding our cost control and expanding of new business. So with this, since early days of December to 2020, we will have a full workload for those 3 different semi-subs.
[Interpreted] So I would like to answer the second question. As you mentioned, the CNOOC, 5 to 10 years CapEx investments in wind, power and other new energy. Indeed, we also have seen this, and we would like to do that, we have already done this in our well service. So we have invested and paid a lot of emphasis on the new energy development. So for the 5 strategies proposed by COSL recently, including the integration, the internationalization, the cost of control, et cetera, from the 5 strategies, you can see we hope to construct ourselves from a internationally world-class well service company with Chinese characteristics with this globally recognized first-class energy service company with Chinese characteristics. From this, you can see our determination and confidence to do this transition.
And we have answered and fully understand the goal of carbon emission peak and carbon emission utilization. And from the top level of management, we have already established our own schedule and measures to do our own company's governed initial peak utilization plan. And from the structure and management, we all have stressed a lot about the development of new energy business. So we have done several actions like the establishment of green equipment, green factory, green business, et cetera. And we also have, given our presence in CCUS industry and new energy business, et cetera, like wind, power, plants and monetize functional ocean and drills. And you can also see that we have started our own business in hydrogen reservation, exploitation, et cetera.
So for CNOOC CapEx, we will definitely follow their investments and their development in the future, and we will also correspond to them as well according to their plan. And I think this is definitely like a gradual change in development. And it's actually through the accumulation of enough efforts in the quantity, we will definitely have the development of the quality. Thank you.
The next question comes from [ Alex ] of Swiss Bank.
[Interpreted] My name is [ Sarachi ], and I have one question regarding the gross profit margin for the Well Services segment. I'm just wondering for the current existing contract with CNOOC, whether there's any prospect in terms of hiking the current contract price subject to the current oil price? And also for the new contract, is there a time gap between when we see some of the revenue and the gross profit increases versus the new contract being signed? And if so, what is the time lag in terms of [ ounces ]?
[Interpreted] So thanks for your questions. So for the technology part, indeed, we have expected some growth of the GM, and we have done several actions. So you can see that the profitability is increasing due to use of technological accumulation. And we have proposed the strategy of technology driven the profitability and development. So you can see the profitability accumulated by technology is quite high recently.
But you have to know for the well service industry, although the oil price now is quite high, how we have to consider the supply relationship globally and plus other affected influences. So currently, our well service price is quite stable. So the technology actions we have done are including this improvement of the development of R&D of our self-innovative and self-developed technologies and the conversion of the -- such results. And we have invested a lot of capital in R&D, and this is 1 of the 4 different segments with our highest capital investment. And we definitely have enough financial guarantee for this. So with our investment in R&D, and we hope to facilitate the conversion and application level of our technology. So this is the first measure.
The second one is actually we have reinforced the control of the costs. So we have utilized a lot of domestically made devices and equipment. And you also see that we have used the fuel effect to use this big amount of procurement to trade for a lower price with the suppliers. And in doing this, we hope to increase our profitability.
In the future, we have definitely seen the pace of the development of GM, the gross margin in the well service industry.
And we -- except for the 2 actions we have mentioned, we also have done other different, in fact, the lean management. We have done the cost check and the audit of the single drills. And we also hope -- actually, we are very confident to see the growth of the gross margin in the future. And because of R&D and the rolling out of the different applications and conversion, we see the profitability of technology.
The next question comes from Zhao Nai Di of Everbright Securities.
[Interpreted] So I'm Zhao Nai Di from Everbright Securities with several questions. The first one is actually for the fourth quarter for this asset impairment, how would we do in the fourth quarter? And then we have also seen the national emphasis on energy and how we deal with that in the first quarter as well.
[Interpreted] Thank you so much for this asset impairment. You can see actually, we were talking according to the regulation and the considerations of this National Security Bureau and the risk of that. So in the fourth quarter, we will do this a full assessment and the test of that. And later, we will disclose it.
And for the second question about the workload is actually not the correct time for me to disclose it now because it's not very clear until now. In the later strategic disclosure meeting, we would disclose that as well. And we believe, for the next year and the first quarter workloads, I think the big backdrop of the energy security and energy development of China workload would definitely be full in the future.
The next question comes from Xiaowei Shi of BOCI.
[Interpreted] So actually, I'm Xiaowei Shi from BOCI, and I only have one question for management team. I want to know the prospect -- the prediction of the first quarter of the company. Do you still expect a stable and a similar performance compared to last year? And how do you expect it for the fourth quarter?
[Interpreted] Thank you for the question. For the first quarter prediction, we still hope it to have a stable growth and grow at a stable manner. You can see actually for the different segmentation of businesses like the drilling and the marine support, we all expect to grow. And for this geophysical service, because of the seasonal influence, we are having some vessels repaired. And we still think this business will remain stable. So the growth will not be very obvious for this. And we still expect this operation of the fourth quarter to be quite stable. This is our prediction.
[Operator Instructions]
[Interpreted] Thank you all for joining us. Due to the time limitation. Our meeting is coming to an end. We hope to see you again next time. Have a good one. Goodbye.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]