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Extracted from Annual Report 2017

Dear Valued Shareholders,

On behalf of the Board of Directors, it is with great pleasure that we present to you the Annual Report for Dayang Enterprise Holdings Bhd ("Dayang") for the financial year ended December 2017.

2017 is the year that marks the lowest point in our history as a listed company since 2008. The current challenging operating environment in the oil and gas industry resulted in the Group's first ever recorded losses in its annual results. Our disappointing financial performance was the result of a prolonged and depressed down cycle in the price of crude oil which led to significant reduction in work orders and contracts across the value chain. However, the industry experienced a strong recovery in crude oil price towards the end of 2017 as the production cuts undertaken by both OPEC and non-OPEC countries started to yield the desired results. Crude oil price also briefly breached USD60 mark for the first time in three years in January 2018.

Dayang has always been proud with its impeccable track record in brownfield maintenance and hook-up commissioning services which have translated into numerous highly-coveted accolades for the group. While we have not been spared from the weak business environment, we have never lost our focus in delivering the best to our esteemed customers. In fact, we continue to improve our operational efficiency via various cost optimisation measures to further streamline our business without compromising our execution qualities for jobs undertaken. The lower work orders throughout the year have also served as a timely reminder for us to work harder and to continue to strive for better operational excellence.

Our vessel-chartering subsidiary, Perdana Petroleum Berhad ("Perdana") remains a drag to our profitability in view of the challenging environment for the offshore supply vessels' (OSV) market. This has been financially challenging for Dayang to endure as Perdana Petroleum has been dependent on Dayang for cash advances to sustain its operational expenses and loans repayments in order to stay afloat. The sustainability issue of Perdana is constantly being examined and addressed. At this stage, Perdana remains a strategic fit in Dayang's long-term aspiration to be the undisputed market leader in offshore maintenance services. Furthermore, we still believe that the ownership of vessels will come in handy for our bidding for major contracts which typically require provision of marine vessels to execute the maintenance services contracts. If there are any changes to the strategies and plans going forward, we will continue to engage with all our valued shareholders.

At this juncture, we would like to take this opportunity to express our heartfelt appreciation to all our dedicated Board of Directors, management team and employees who continue to place their faith with the company. Dayang continues to keep the interest of its team members at the top of its priorities as they are the cornerstone of the success of Dayang all these years. Riding on the strong foundation, we are confident that the company should continue to achieve good results going forward and restore Dayang to her glorious days. Our strong order book of RM2.5 billion (most of the contracts on call-out basis) will provide strong earnings visibility over the next five years, and hopefully we will even emerge stronger from here onwards.


On behalf of our Board of Directors, we wish to express our sincere thanks to all our stakeholders who have played critical roles in helping us to stay afloat during financial year 2017. The strong confidence from our valued clients and business associates motivates us to go from strength to strength and the quality delivery from our vendors and suppliers ensure our impeccable track record remains intact. To our bankers, financiers and investors, we thank you for your continued support and trust in Dayang Group.

Last but not least, to our management and employees, thank you very much for your hard work that steered us through the rough turbulence together. Your loyalty with the Group during these difficult times will never go unnoticed as we strive to propel Dayang to greater heights.

Thank you

Ali Bin Adai

Tengku Dato' Yusof Bin Tengku Ahmad Shahruddin
Managing Director