Global Vectra Helicorp Ltd, India’s largest dedicated offshore air logistics helicopter company, today announced results for the quarter and nine months ended December 31, 2007.

Financial Highlights

– Quarter ended December 31, 2007

· Revenue of Rs. 41.76 cr. It was impacted since some helicopters could not be deployed for entire contracted period due to non availability of pilots. As of date, the company has sufficient number of pilots to deploy all the contractual helicopters. In addition, the company is aggressively training new pilots for future requirements.

· Staff cost includes Rs. 2.38 cr. ex-gratia payment to retain scarce talent.

· Direct operating expenses include higher fuel costs of about Rs. 1 cr. not covered by fuel price escalation clause.

· Other expenses include Rs. 2.22 cr. restatement cost of foreign exchange loans and extra provision of over Rs. 1.09 cr. The restatement cost of foreign exchange loans will have to be offset against other income of Rs. 15.28 cr. for nine months.

· Expenses also include Rs. 1.53 cr. pertaining to previous quarters.

· Depreciation is higher by Rs. 2.68 cr. and financial cost is higher by Rs. 1.59 cr. due to fleet expansion. Of this, one additional helicopter would be deployed on contract from February 2008.

· Loss of Rs. 9.88 cr. due to above factors.

– Nine Months ended December 31, 2007

· Revenue of Rs. 131.84 cr.

· 92% of revenues generated from long term contracts

· Other income is mainly due to mark-to-market of forex loans

· Revenue is net of contractual deduction of Rs 48 lakhs and helicopter spares consumption and maintenance includes Rs 300 lakhs, direct operating expenses includes Rs 77 lakhs, other expenses includes Rs 38 lakhs which pertains to previous year.

· Net Profit of Rs. 4.03 cr.

Commenting on the performance, Mr. Allan Brown, Chief Executive Officer said, “The results were affected due to a host of factors but the situation has been normalised since the beginning of the current quarter. We are also pursuing rate revision with existing customers as well as entry into corporate and tourism charters.”

Operational Highlights for Nine Months ended December 31, 2007

· Over 50% market share in offshore helicopter transportation services

· Customers include ONGC, Reliance Industries, Gujarat State Petroleum, British Gas India, Transocean Offshore, etc

· Total number of helicopters – 22. Helicopters under contract – 17

· Revenue hours – 11389

· Capacity utilisation – 83%

· Fuel price escalation clause for 12 of the 17 helicopters on long term contract

· Rupee appreciation impact is neutral on the operating results as forex revenue and expenses almost match in absolute terms

· Fleet size to go up to 29 helicopters by March 2009

· Average age of fleet is around 6 years (against around 14 years in 2006) and will further reduce to 4 years by 2009 with induction of new helicopters

Industry Scenario

Oil and gas is the major driver for economic progress and demand in India is likely to grow from 115 million tonnes in 2004 to 377 million tones by the year 2020. India is one of the least explored regions in the world with only 18% acreage explored so far. 85% of India’s oil & gas is located offshore. Prospects for offshore helicopter services are directly linked to scale and momentum of the offshore oil and gas exploration and production.

Of the global population of around 25000 helicopters, around 185 helicopters are operating in India, of which 120 are in non-scheduled segment. Only 38 helicopters are used for dedicated offshore oil exploration and production spread on the east and west coast. About 30 helicopters are used on the west coast as Mumbai High is the largest producing field in India.

ONGC is the largest user of offshore helicopter services in India. ONGC, British Gas, Cairn Energy and Reliance Industries have offshore exploration and production on the west coast and ONGC, Gujarat State Petroleum Corporation, Reliance, Cairn Energy, GAIL, HOEC, Dolphin Drilling and Transocean have offshore exploration and production on the east coast.

Under various rounds of NELP, the government has offered 163 blocks to the bidders resulting in private sector ownership of about 8% of the total recoverable oil reserves and 22% of the total recoverable gas reserves. Private sector / joint venture companies have made major discoveries in five major areas: Mahanadi-NEC offshore, Krishna-Godavari offshore, Gulf of Cambay, onshore Rajasthan and Cambay Basins. Krishna-Godavari region is likely to rival Mumbai High region in oil and gas recovery in future and hence be a major growth driver for offshore helicopter services. Helicopter deployment in the east coast is already growing and would rise substantially once the production commences by the year 2009-10.

Business Outlook

Global Vectra Helicorp Ltd is India’s largest dedicated offshore air logistics helicopter company since 1998, serving the oil & gas exploration and production on both sides of the Indian subcontinent.

It is India’s first ISO 9001-2000, ISO 14001-2000 and OHSAS ISO 18001-1999 certified aviation company. The company introduced Bell 412 Helicopter to the Indian offshore Industry and has the largest Bell 412 Helicopter fleet in this part of the globe. It also introduced EC 155B1 helicopter for first time in India for deep water utilization. It has maintained more than 95% helicopter availability, flown over 40,000 offshore hours and carried over 1 million Pax since inception.

The company has strong in-house Maintenance, Repairs and Overhaul (MRO) capability as endorsed by various third party audits undertaken by international and local aviation agencies. It is the only helicopter company in India certified to undertake the 3,000 hours / 5 years check on the Bell 412 helicopter fitted with Pratt & Whitney PT6T-3 Series engines. This is the most advanced check with complete overhaul of the helicopter and its components. The company gets priority for availability of parts, services and extended credit line due to long-standing relationships with various OEMs and other agencies. The in-house MRO capability reduces the time taken for servicing of helicopters resulting in additional flying hours. This coupled with lower labour costs in India enables it to offer services at competitive rates in comparison to other operators.

There are strong entry barriers in the industry due to restriction on foreign ownership, high capital cost, scarcity of skilled manpower and other government regulations. With considerable experience and expertise, the company is well placed to capitalize on the growing demand for air-transportation of crew and cargo arising from:

· Increasing acreage under oil & gas exploration

· Deployment of additional rigs for production at new fields

· Entry of new players – NELP VI attracted 162 bids for a total of 52 blocks with participation from 35 foreign firms

· Investments in enhanced oil recovery

The government has articulated its vision to have complete exploration coverage by 2025 which would be a sustained long term demand driver for offshore helicopter services. Global Vectra Helicorp has recorded healthy growth over the past few years and is set to sustain the momentum with fleet expansion and higher rates.

Sourced From: Equicorp

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