(Extracted from Annual Report 2020)
The six years since the downturn in the oil markets have proved immensely challenging. In the face of this, I am proud of the resolve shown by the Mencast team in delivering operational, structural and capital improvements, and to generate revenue growth in 2020.
During the year, Mencast reduced debt, generated EBITDA $18.1 million and finished the year with cash and cash equivalents of $15.6 million. These figures are a result of our relentless focus on building new business, increasing efficiency and improving capital structure.
Mencast’s priorities in the year ahead are clear. The first priority is to strengthen our financial position and our asset sales and debt reduction will continue in the year ahead.
As our financials strengthen, we will turn our priorities to investing into the areas that will drive our long term transformation and sustainable growth.
The severe industry conditions and shutdowns arising from the COVID-19 situation have made it clear that to succeed we must keep the core of Mencast while adapting our business to a post-pandemic world.
At the core, Mencast is a customer focused organisation, with deeply integrated vertical capabilities and strengths in design and material sciences. During the decade long boom in the oil and gas markets, our assets and debt increased to gain leverage to this cycle, at the cost of adaptability and resilience to a downturn.
As we emerge from this crisis, Mencast will focus on leveraging our core strengths while remaining lean and flexible in how we build and run our business. Lean operations starts with management, but is reflected throughout our company from our “asset light” focus to how we manage our working capital.
Relentless focus on customer value in the fast evolving marketplace, design and technology are the strengths Mencast will leverage to improve capital efficiency and maximise sustainable returns to shareholders.
The global pandemic and industry conditions have provided both the imperative and the opportunity to recalibrate our business and rebuild earnings power.
There are three important opportunities we will focus on. These are keeping economies moving, sustainability and innovation.
As well as internal development, some of our innovations are originated externally, such as through Mencast Innovation Centre (“MIC”), our Enterprise Singapore accredited accelerator. Others are from innovation leaders seeking Mencast as a manufacturing or distribution partner.
An example of one such technology is Virestorm, a proprietary sanitation system developed especially for COVID-19, and highly effective against all airborne pathogens.
The Virestorm system thoroughly cleans air and all surfaces and was developed in Mencast Innovation Centre with Singapore Heavy Engineering Pte. Ltd. It has undergone independent testing for effectiveness and is receiving strong expressions of interest from potential customers. Mencast is the manufacturer and distributor of this product.
Appreciation and Thanks
The staggering toll of COVID-19 has driven home stronger than ever the importance of people in Mencast’s success.
I extend thanks to our employees, management and Board of Mencast, who have worked tirelessly to reinvigorate our business, and also voluntarily undertook pay reductions for the past several months to help us through the difficult times.
My deep appreciation also goes out to our many partners and stakeholders, including customers, suppliers, bankers and shareholders, for their unwavering support and confidence in Mencast.
Our work is by no means finished, but we are on the right path to emerge from our difficult journey of the past few years stronger than ever.
Sim Soon Ngee Glenndle
Executive Chairman and Chief Executive Officer