COOEC(SH:600583)2025-11-10 03:34Summary of CNOOC Engineering Q3 2025 Earnings Call Company Overview - Company: CNOOC Engineering - Report Date: October 25, 2025 - Period Covered: First three quarters of 2025 Key Financial Metrics - Net Profit: Decreased by 8.01% to 1.605 billion RMB [2][1] - Revenue: Decreased by 13.54% to 17.661 billion RMB [2][1] - Market Contracting Amount: Increased by 124.85% to 37.24 billion RMB [2][1] - Overseas Business Revenue: Reached a historical high of 29.336 billion RMB [2][1] - Total Backlog: Approximately 59.5 billion RMB [2][1] Operational Highlights - Projects Executed: 75 large-scale projects, with 22 completed [4][1] - Construction Achievements: - 21 land-based jackets and 14 modules constructed - 23 offshore jackets and 16 modules installed - Laid 273 km of subsea pipelines and 167 km of subsea cables [4][1] - Steel Processing Completion: 27.7% of planned volume [4][1] - Offshore Investment: Decreased by 12.32% [4][1] Order Conversion and Revenue Outlook - Order Conversion Cycle: - Domestic projects: 1-2 years - International projects: 2-3 years or longer - New BH project expected to take 5-6 years for revenue recognition [5][1] - Profitability of Overseas Projects: - 2024 overseas gross margin: approximately 9%, lower than domestic levels - Slight improvement in 2025 [5][1] Research and Development - R&D Investment: Increased significantly compared to the previous year, focusing on apparel and underwater industries [3][1][8][1] - New Product Development: - Deepwater trees in R&D phase, expected results in H1 2026 - Nearshore trees awaiting mass production orders [7][1] Cash Flow and Payment Terms - Cash Flow Management: - Longer payment cycles for overseas projects (approximately 45 days) compared to domestic (30 days) - Prepayment ratios: 10% for general contracts, up to 20-30% for some overseas projects [9][1] Dividend Policy - Dividend Strategy: - Cash dividends prioritized, with a minimum payout ratio of 30% set for 2024-2026 - 2024 actual payout ratio reached 41% [10][1][11][1] Future Outlook - Short-term Expectations: Anticipated revenue growth in Q4 due to project deliveries, despite some delays in Q3 [12][1] - Long-term Goals: Aim for 30-60 billion RMB revenue with a 7% compound growth rate, targeting a total of 60 billion RMB by 2035 [12][1] Conclusion CNOOC Engineering is navigating a challenging environment with a focus on improving operational efficiency and expanding its overseas presence. The company remains optimistic about future growth driven by a robust project pipeline and strategic investments in R&D.