Investments
We are focused on delivering value to shareholders and seeking growth opportunities.
Major Developments in 2014

k1 Ventures completed the sale of Long Haul Holding Corp (Helm) and distributed total dividends of 7.5 cents per share in 2014.

KrisEnergy grew its portfolio to 19 contract areas in Southeast Asia, 12 of which are operated by the company.

M1 launched a nationwide 300Mbps 4G network, and introduced a fibre cloud-based data centre with enhanced offerings to enterprise customers.


Focus for 2015/2016

k1 Ventures will manage its investment portfolio to create shareholder value and distribute excess cash as and when its investments are monetised.

KrisEnergy will focus on executing its planned development projects, maximising production efficiencies and controlling capital expenditure.

M1 will focus on delivering better user experience to further increase market competitiveness.


Profit Before Tax
$55m
as compared to FY 2013's $80 million.
Net Profit
$43m
as compared to FY 2013's $54 million.


Earnings Review

Pre-tax earnings from the Investments Division decreased by
$25 million or 31% to $55 million for the year due mainly to higher overheads. This was partly offset by profit from disposal of investments and write-back of impairment of investments. Net profit was $43 million for FY 2014, compared to $54 million for the previous year.


k1 Ventures

k1 Ventures (k1) is an investment company with interests in education and financial services.

For the financial year ended 30 June 2014, k1 reported revenue from continuing operations of $32 million, a decrease of $64 million compared to the prior year. This was due to the absence of divestment gains from McMoRan Exploration Company in FY2013, and a decrease in investment income from Knowledge Universe Holdings LLC.

Operating profit from continuing operations was $26 million compared to $65 million in the prior year. EBITDA from continuing operations of $26 million was $40 million below the prior year as a result of lower investment income. Net profit from continuing operations attributable to shareholders was $20 million compared to $52 million in the prior year.

For FY 2014, k1 paid total dividends of 7.5 cents per share to shareholders, increasing cumulative distributions to shareholders to 33.8 cents per share or more than $700 million since 2005.

In December 2014, TPG Capital's Newbridge Asia Advisors IV sold all of its economic interests in China Grand Automotive Services Co Ltd (China Grand Auto), including k1's entire interest in China Grand Auto. The proceeds of approximately US$32 million received from the sale will be distributed to shareholders as an interim dividend of 1.5 cents per share on 12 February 2015.

k1's investment in Guggenheim Capital continued to perform as expected, with a delivery of a 7% annual dividend from the Preferred Units.

In December 2014, Knowledge Universe Education, a subsidiary of Knowledge Universe Holdings, completed the sale of its international platforms including its early childhood education business and the Canadian International School in Singapore.


Net Profit ($ million)
Earnings Highlights ($ million)
  2014 2013 2012
Revenue 64 27 152
EBITDA 17 25 134
Operating Profit 16 25 133
Profit before Tax 55 80 196
Net Profit 43 54 194
Manpower (Number) 183 198 170
Manpower Cost 135 93 95
Krisenergy

2014 marked a step change for KrisEnergy Ltd, a Singapore-listed independent Exploration and Production (E&P) operator in the upstream oil and gas industry. During the year, KrisEnergy expanded its portfolio of operated assets, made advances in several oil and gas development projects, and reported strong growth in its production and proved plus probable (2P) reserves.

Average net production increased 161% to 7,612 barrels of oil equivalent per day (boepd) as a result of a full-year's contribution from the Bangora gas field in Block 9 onshore Bangladesh, which accounted for 5,477 boepd. The B8/32 and B9A oil and gas fields in the Gulf of Thailand produced an average of 2,134 boepd net to the company in 2014.

Improved reservoir performance at the Bangora field also partly contributed to a 120% uplift in KrisEnerg's 2P reserves to 71.0 million barrels of oil equivalent (mmboe) as at 31 December 2014. Other additions stemmed from the conversion of best estimate contingent (2C) resources to 2P reserves associated with the Wassana oil discovery in Block G10/48 in the Gulf of Thailand and the Lengo gas accumulation in the Bulu production sharing contract (PSC) offshore East Java, Indonesia.

KrisEnergy increased its working interest in G10/48 to 100% from 25% in May 2014 and took over operatorship of this block, which contains three oil discoveries including Wassana. Presently under development, the Wassana project accounted for 13.6 mmboe of the increase in KrisEngergy's 2P reserves. The field is expected to commence operations in 2H 2015, with production reaching a plateau of about 10,000 barrels of oil per day.

The Lengo gas field in the Bulu PSC accounted for 25.4 mmboe of the growth in 2P reserves, following the approval of the development plan by the Indonesian authorities in December 2014. The development comprises an initial four producing wells, an unmanned wellhead platform and a 65km pipeline to transport the gas to shore. The production of the Lengo gas field is expected to start in 2017.


Portfolio Growth

KrisEnergy's other acquisitions in 2014 included a 41.7% non-operated working interest in Block A Aceh onshore Sumatra, Indonesia. The field contains three gas discoveries with an approved development plan and associated 2C resources of 30.4 mmboe.

The company acquired an additional 30% working interest in Cambodia Block A in the Gulf of Thailand and took over as operator. It is now negotiating with the Cambodian authorities over the development of the Apsara oil field.

During the year, KrisEnergy received direct government awards for projects which it operates such as the Sakti PSC offshore East Java and Block 115/09 offshore north-central Vietnam. It also took a 45% non-operated working interest in the SS-11 exploration acreage offshore Bangladesh.

The company's portfolio comprised 19 contract areas at the end of 2014 in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam. It operates 12 of the blocks, which contain a combination of exploration and appraisal targets, development projects and producing fields.


Business Outlook

The precipitous fall in global benchmark oil prices since June 2014 to under US$50 a barrel has been sorely felt throughout the E&P, oil services and marine industries across all geographies.

Despite the turbulence in the oil markets, KrisEnergy's strategy of portfolio diversification across a wide range of fiscal and regulatory regimes, and its business expansion within the oil and gas industry, provides some cushion against the lower oil prices.

KrisEnergy's 2014 production profile was 18% oil versus 82% gas, where gas sales in Asia are under long-term contract at either a fixed price as in the case of Bangladesh or adjusted every six months as in Thailand.

The company remains on track to execute all its planned development projects starting with the Nong Yao and Wassana oil fields in the Gulf of Thailand in 2H 2015, followed by two gas fields in Indonesia in 2017. With limited near-term exploration obligations under its concessions, KrisEnergy is able to adjust its work programme to maximise production efficiencies and control capital expenditure. It will also explore possible cost savings without compromising its operations and health and safety standards.


KrisEnergy has 19 oil and gas assets in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam as at end-2014.
M1

As at end-2014, M1's mobile customer base was 1.85 million. Its postpaid customer base grew 19,000 to 1.15 million, with the number of customers on tiered data plans increasing to 66%, from 49% a year ago. The prepaid segment was impacted by a regulatory change in April 2014 that reduced the number of pre-paid SIM cards per customer from ten to three, and as a result, M1's prepaid customer base decreased to 703,000. Fibre customer base increased by 18,000 to 103,000, driven by M1's attractive fibre broadband plans and upgraded service offerings.

During the year, M1 continued to enhance the customer experience through the introduction of faster networks, including the launch of Singapore's first nationwide 300Mbps LTE-Advanced network. Corporate customers were able to enjoy the benefits of fibre services through M1's attractively priced 500Mbps and 1Gbps plans, and all new 10Gbps service, the fastest fibre service on the Next Generation Nationwide Broadband Network (NGNBN) that was made available in May 2014 to cater to corporate customers with high-bandwidth needs such as banks and cloud-service providers. M1 also launched a new state-of-the-art data centre in October 2014, alongside a suite of attractive cloud-based solutions, further broadening its proposition to the corporate segment.

Based on current economic outlook and barring unforeseen circumstances, M1 estimates moderate growth in net profit after tax for 2015.


M1 has partnered operators globally to provide its customers coverage and roaming services in over 230 countries and territories.