Special CEO Feature
You have to be prepared and have a strong balance sheet. And of course, is there a way you can position yourself either for opportunities coming out of those discontinuities, or on the other hand, how can you defend yourself from those challenges.
… Ander s Ma ik rv , V P, C porae St tg nd Buins or t raey a s es Dvlopmnt, St t ee e After our World Assembly we also pulled aside the following industry leaders for 60-second interviews: Looking back on 2011, what lesson(s) will you take into your business planning for 2012?
“2011 was an extraordinary year where we saw volatility in prices of equities, currencies and commodities never seen before and with everyday further shocks to the financial system, particularly in Europe. The major lesson here was more of a reminder than learning, but cash is king and when the ducks are quacking feed them.
Going into 2012 one's business must be strong enough to withstand long periods of difficult trading and also strong enough to take advantage of opportunities that arise from others’ weakness. Having adequate cash is the major way to be positioned. If you are making an acquisition, the best way if the seller is slightly distressed is to make an offer and make it simple and in cash.
So in the same vein, if you want to grow your business go where the cash is and that is not Europe or the Americas, go East! The Middle East and in particular China and Hong Kong. It's no good knocking on the same doors that we have been for the last 30 years in the West, we need new doors and new relationships. These don't come easily and so have to be worked upon, but it is never too late to start.
2011 saw equity prices tumble regardless of rising commodity prices and saw the ability to fund in equity extremely difficult. This will turn at some stage but for 2012, we have to be prepared for the worst and assume it will remain very tight, so we have to think out of the box and see what other modes of funding are possible.
M&A is one alternative but a lesson I learnt in 2011 (and 2010) was that acquisitions can be very distracting, come with huge risks as you don't know exactly what you are buying till you have it and you can't guarantee they will happen right up to the last minute, so always have a strong organic plan and don't involve all your staff in a deal until you are confident it will happen.
Finally, flying economy class can save a lot of money and on many flights is not as bad as people say, so a day flight to Canada it is quite adequate to fly economy, but if you are flying to and from Hong Kong and you want to have good meetings, don't even try it, just go business and accept it (but you can still shop around and get discounted business flights!)”
… A ndre w Mo , C O, VSA Ca t lpia nk E =============================================== Looking back on 2011, what lesson(s) will you take into your business planning for 2012?
“Kentz listed in early 2008 just ahead of the biggest economic crisis for decades and a decline in the oil price to lows that year of $35 a barrel. Against this backdrop we grew our backlog of work on hand over 60 per cent during 2008 to 2010.
Yes, we were starting from a smaller base than some, but with every challenge comes opportunity. Reports suggest that 2012 is set to be another challenging year with uncertainty still over the global economy and the outlook for the energy industry.
Kentz continues to grow, with first half revenues in 2011 up 50 per cent on the same period last year, and importantly we have invested in our business; in people, in systems and procedures, and in our shareholder base with a move to the FTSE250.
If I take anything from 2011 it is to focus on the metrics that are within our control; a strong and diversified service offering, good mix of clients, geographical flexibility and delivery of projects.
aoil
Drillers and Dealers :::
::: December 2011 Edition
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44