Morning, ladies and gentlemen. First of all, thanks for attending the interim results announcement 2019 of China Oilfield Services Limited today. Please allow me to introduce management representatives on stage to you. Mr. Qi Meisheng, the Chairman. Mr. Cao Shujie, CEO and President. Mr. Zheng Yonggang, CFO. Miss Wu Yanan, Board Secretary. In today's presentation, Mr. Zheng Yonggang will walk you through the financial figures and operational review for the first half year of 2019. He will share with you the company's outlook in the latter half of the year and the future. After that, we will open the floor for questions. Let me pass the time to Mr. Zheng.
Good morning, ladies and gentlemen. Thanks for attending COSL's interim results press conference 2019. Please take a note of our disclaimer. Today's presentation will be divided into two parts, results overview and the company outlook. In the first half of 2019, international accrued oil price is around $60 per barrel. The oilfield service market has recovered, which was contributed by the increase in global expenditure on upstream exploration and development and in particular, the significant increase in demand for exploration and development in China offshore. In view of new challenge of industry, COSL has gradually turned loss into profit with improvement of profitability through adjustment to management philosophy and focus, continuous reform and innovation for quality improvement and efficiency enhancement, as well as implementation of the technology and international development strategy.
From this slide, you can see the continuous increase for global upstream E&P CapEx, and also the continuous increase for domestic E&P CapEx, especially the continuous increase for domestic exploration investment by our parent, CNOOC Limited control and the dominant one is China Oilfield Services. From this page, you can see the both international market and the domestic market has a two-digit growth. The management believe such kind of strong growth can continue for next few years. Now, we turn to the most interesting part, financial performance. In terms of financial performance, in the first half of 2019, COSL achieved a revenue of CNY 13.5 billion, representing 67% increase year-on-year. Due to the enhanced economy of scale, operating cost only increased 32%. The result is we turn from the loss into profit. We achieve the net profit, nearly CNY 1 billion, CNY 986 million net profit.
Such kind of remarkable financial performance contributed from the two factors, increased operation volume and utilization rate for our equipment such as jackup, semi-sub, marine support, vessels, et cetera. The second factor is our well service technology segment. Operation volumes and revenue was greatly improved. From this page, you can see the contribution from our technology, the well service from our technology segment. In the 2015, it's only 30%. 2016 is around 37%. 2017, 38%. 2018, 42%. The first half of 2019, we already achieved 49% our total sales revenue generated from our technology segment, well service segment. In the next year, in 2020, we believe we can achieve more than 50% of our sales revenue generated from our well service. The management strive for in 2025, more than 70% of our sales revenue generated from our well service technology segment. This is our target.
In terms of performance of specific segment, the revenue for the four segments all increased to the different degree. Among which, Drilling and Well Service was the most significant. With revenue of CNY 4.49 billion and CNY 6.62 billion, respectively. The operating profit of Well Service increased 129% year-over-year. The Drilling segment and Geophysical Survey and Acquisition segment have all achieved profit. I still remember in the beginning of this year, our Chairman, Mr. Qi, in this conference room, said to you, we try to make our Drilling segment profitable. Now, we made it. In the first half of 2019, we made it profitable. This is the four segments. Our Drilling segment representing 49% increase. Our Well Service, 95% increase. Our Marine Support segment, nearly 16% increase. Our Geophysical Survey and Acquisition, nearly doubled.
In terms of operating profit, for our drilling segment, we achieved CNY 250 million operating profit. Of course, our well service contributes the most, more than CNY 1 billion, CNY 1.19 billion operating profit. This our four segments, the financial performance. We turn to the market development, domestic market and overseas market. COSL's global market capability has been further enhanced, which is conducive to coordinating the allocation of resources in both domestic and overseas market, making positive contribution to the strengthening of domestic exploration and development, and promoting high-quality development of overseas business on ongoing basis, while assuring the absolute leading position in China offshore market. In the first half of 2019, COSL made flexible allocation of resources to meet the domestic market demand, which was conducive to the increase of overall utilization rate and profit return of the company.
Although there was a year-on-year decrease in the number of overseas equipment, overseas revenue recorded year-on-year growth to CNY 3 billion, representing 50% increase. Last year, the first half 2018, we reported our overseas revenue is about CNY 2 billion. Now we CNY 3 billion, make it CNY 3 billion. With steady increase of utilization rate and breakthrough made in the well service segment. For instance, COSL had increased operation volume of high temperature, high pressure wells for different wells. Made successful first attempt of the plugging and abandonment project and sold new equipment to overseas market. This just a illustration for our domestic and overseas market. We make flexible allocation of domestic and overseas resources to meet increasing demand. We apply allocate 36 domestic drilling rigs, increased by eight. Increase in the volume of both exploration well and adjustment well.
Substantial increase in operation volume of 3D acquisition and submarine cable business. In our overseas market, we acquired 36 new overseas contract, two new market and five new clients. Breakthrough in the well service segment. For example, increase in the volume of high temperature, high pressure wells, successful first attempt of the plugging and abandonment of the project, and sales of new equipment. This is just the illustration for our domestic market and overseas market. Now, I finish my presentation of financial review of first half of 2019. In summary, I want to emphasize two points. First, COSL made strong growth in terms of operation volumes, operating income, and net profit. Due to the Seven-Year Action Plan in domestic market and gradual recovery in the international market, we believe that COSL will continue to have strong growth for the next few years.
Second, such kinds of strong growth mostly contributed from the well service segment. In the past few years, COSL put heavy investments on technological research. Now, I will illustrate some of the new tech and new business COSL just achieved. For example, the new technology, logging capability, sCREW system. High temperature sCREW logging system has been applied, the extremely high temperature sCREW logging system can achieve 232 degrees. The 172 microns is conducting high temperature well operation in Bohai Bay. Our oil fields chemical and drilling, the upper temperature resistance limit of the HDO drill, high temperature, oil-based and drilling fluid exceeds 230 degrees. Nice 32 complete drilling with overcome major challenge, such as a high temperature, high pressure for drilling ability of target section and overflow, and a great market potential.
In 2019, it is planned to drill and explore more than 40 wells in offshore China, and high temperature and pressure areas in the onshore regions are in high demand. Another new technology is the MIL. The MIL is our equipment to sell to the international market. With the transformation and application of multiple technology achievements, COSL has achieved the result in sales of oilfield technical equipment. With the sales of a multifunctional ultrasonic imagined logging equipment, we name it MIL, amounting to nearly CNY 100 million, and has achieved large sales of China high-end logging equipment to world-class oilfield service company for the first time. Now, I will illustrate to you some of the new business. In the first half of 2019, COSL succeeds in the first overseas integrated plugging and abandonment project.
COSL has improved itself and accumulated valuable experience in the management, operation, logistics support for the integrated plugging and abandonment project. Enhanced its reputation, which lays the foundation for the implementation of subsequent well plugging and abandonment project. From the public resource source, it is estimated the demand of well plugging and abandonment in Southeast Asia will see further increase in the upcoming years. Here are just some of the numbers we sorted from the public source here. 2019 and 2020 continuing to the 2021. COSL also puts much focus on our QHSE. COSL maintains overall suitability of production safety and continuously improves quality management with satisfactory operation service and product quality. The OSHA rate was 0.139. While making steady progress in the operation market, COSL continued to attach great importance to the promotion of corporate governance and shares with capital markets.
In the first half of 2019, COSL laid emphasis on compliance operation and strengthened communication with investor and protection of shareholders' interests and rights. During the period, COSL was included in the list of IR interactive activity of Asia's leading company and well-recognized by capital market. Now, I turn to the company outlook, the second part. Before we look forward to the second half and the future, let's take a look at the overall performance of international oilfield service company in the first half of 2019. Based on the comparison above, you may find that oilfield service industry still face different kinds of challenge, and the COSL's operating performance is in the upper range of the industry during the first half of 2019. For example, COSL achieves nearly 67% of the increase in terms of sales revenue, which is at the top of the oilfield service industry.
The COSL leads the industry in terms of the sales revenue growth and the net profit growth. The market environment. Looking forward to the second half of 2019, the global political and economic situation will still be challenged by multiple risks, resulting in the uncertainty in the trend of global oil price. In addition, despite that the rebounded oil price and increased capital investment by oil and gas company have driven the recovery of the global drilling rig market with frequent bidding activity and increasing utilization rate. Overcapacity still be an issue in the short and mid-term, reflected by the certain idle drilling rig and the potential idleness of drilling rig under construction. The rig are unlikely to report significant increase in the short term due to the intensified competition for the contract.
Although the industry face above challenge, COSL is still facing development opportunities. First, oil and gas energy continue to play an important role in China energy consumption structure. The Seven-Year Action Plan in domestic market will provide boom period for the oil service industry. Just I mentioned before, due to the Seven-Year Action Plan in the domestic market and global gradually recovery in the international market, COSL growth story will continue. Hence, the recovery of industry of China, increasing efforts in exploration and development, will further bring the positive opportunity for COSL's growth story. Currently, there are still idle resources in the market. COSL can flexible allocate resources through leasing to meet the change of the market demand. Here, just an instance illustration.
Oil and gas continue to make up large proportion in China. The Seven-Year Action Plan driving the oil service industry to a positive society. Still, our capacity in China will increase substantially in 2019. Also, we will go into the new area, such as the wind power. In line with the low carbon trend, COSL actively explores development opportunity in renewable energy industry, such as offshore wind power. This is a new business for COSL. Not only in the domestic market, but also in the international market, COSL's traditional business have new breakthrough. From this slide, you can see according to the service contract obtained by COSL, the technology and the equipment segment of the company will gradually exert scale effect in the six regional market. This contract will be implemented in the second half of 2019 and the next few years respectively.
Compared with historic track record, COSL will have more well service presence in international market. For example, in the Middle East, in Iraq, the first and second integrated service in Missan field. Also in the Saudi Arabia, we have signed the huge drilling program. In Kuwait, we have offshore well drilling project. For example, Asia Pacific. In the Indonesia, drilling project and workover, cementing, stimulation, and logging project. In Malaysia, just I mentioned, some drilling and completion fluid, cementing project, and also the abandonment project. New Zealand, we have the drilling service project. Myanmar, cementing, logging, and perforating project. All the start time in the new project, including our upstream segment to the service, and also including our technology service. As usual, we have prepared a slide of our contract status and the situation of 52 rigs operated under management by COSL as of June 30th, 2019.
As you may already see from our intro result, the volume in the first half of 2019 has been increased. We expect it will extend to the second half of the year. This is the latest information, and for this one, already being replaced by the operation. For our rig operation status in the overseas. This is the operation status in overseas market. More working volume in 2019, and we will still active in the bidding process for some idle rigs. It may change in the future because some contracts are still in the progress. We'll keep you posted. This is just illustration, and the yellow representing in the bidding process. We will keep you posted if some of the yellow line replaced by the operation. Financial management.
In 2019, COSL has and will further adopt structural cost reduction measures and strictly control the cost increment caused by the increase of volume. We take prudent CapEx policy to optimize growth model to the intensive technology and the asset light. The CapEx budget of COSL in 2019 is about CNY 3 billion. Reasonable investment and debt repayment structure has safeguard a healthy cash flow and a 25% debt rating. Therefore, this will enable us to adopt different models of operation and apply different business models. Environmental protection. In line with the general trend of low carbon disposal of the global energy industry, COSL practice the strategy of the environmental friendly and low carbon development to the needs that clean, green, and a highly efficient transformation of China offshore marine vessels.
We have mass construction of 12 LNG-powered oilfield supply vessels, resulting in effective cost reduction, which are expected to be put into use in 2020. The new business, new growth point. Here, I just want to illustrate that the new business we will introduce in the second half, for example, in the EPS for well drilling waste. Well drilling waste refer to the waste generated during the drilling operation, including drilling cutting by the drilling bit, wasted drilling and well completion fluids, and the drilling waste waters. This is a well drilling waste. In active response to the industry requests, COSL will develop environmental protection business such as EPS for waste disposal. COSL has nearly 40 years of service experience in this field and a big operation team comprising nearly 100 experienced staff.
A good experience in the provision of EPS service for over 230 wells, which contribute to the achievement of zero safety and environmental pollution accidents. As the scale of global drilling waste management market continue to expand, there will be huge market potential, and it is expected that operation volume will continue to increase. This new business will be one of the important growth points of COSL, and revenue contribution is expected to happen very soon. Here just some of the information we got it from the public source. For example, the market potential. From BCC Research, scale of global drilling waste management market will reach $7.13 billion. This is the market cap. Domestic offshore waste is estimated to exceed 500,000 tons a year just in China. This is a huge potential.
To meet some of the government and industry zero waste and zero pollution policy. The market potential is huge. Another new business under new growth point is our multi-client business model for our geophysical acquisition service. For geophysical acquisition service segment, COSL further clarifies the business development plan by determining the business focus and mid- to long-term development path, continue to increase investment in R&D of technical products to gradually develop its multi-client business operation capacity. Globally speaking, the multi-client business will continue to grow in the future. COSL has the business capability and a strong track record in Argentina, also in Brazil. In multi-client business, we hope this kind of business will become another new growth point for our geophysical segment. This is the multi-client business. This design is a business model, just an illustration.
We are going into the wind power, the new energy, the new renewable energy. Adhering to the philosophy of green development, technological innovation, COSL will further increase investment in the renewable energy like wind power industry, and strengthen market development to increase its shares in domestic wind power market. COSL streaming segment and the geophysical segment could benefit from this new field. Offshore wind power market. In 2018, totally 4.45 million kW onshore wind power has installed, and 6.47 million kW was under construction in China. China has become the largest offshore wind power country after U.K. and Germany. I just want to show you, wind power also has the huge market potential, we go in this market, and this market will benefit our drilling segment and also our geophysical service segment.
Looking to the future, with growth of oil and gas investment and the recovery of industry, COSL will firmly adhere to the goal of technology and international development. Focus on the technological innovation as the core driving force. Strengthen the flexible allocation of global resources and pay attention to the new pattern of the green, environmentally friendly, and low carbon. The new model and the new market is developing to realize its own service transformation. Finally, we want to become comprehensive solution provider. This is our company's target, from the drilling company to a service company, to be a comprehensive solution provider with new model, new market, and a new trend. Thank you for your consistent support. Here comes the end of my presentation. Questions are welcome, please.
Thank you again for your support.
Thank you for Mr. Zheng wonderful presentation. Now, we will open the floor for questions. Please note that we will provide consecutive interpretation during the Q&A session. Please raise your question one by one and allow some time for the interpretation. If you are guest selected, please let us know your name and the firm you work for. Okay. The gentleman in suit. Yeah.
Good morning. Congratulations. This is Aditya Suresh from Macquarie. Two questions. First, on well services. Revenue here has clearly beaten even the most bullish of expectations. A lot of it has been driven by your tech and in-house tool production. Are you able to provide us with any breakdown of what portion of your revenue within well services is because of your in-house tools, and what portion of that was, say, three years ago? Second is, within that, what sort of growth visibility do you have over the next, call it, six, 12 months for well services? That's the first question. The other one was on margins. Second quarter margins were clearly up versus the first quarter, along with the higher activity that we see. Can we expect margins to further improve on what is a very strong second quarter? Thank you.
早上好，恭喜管理层，恭喜公司取得这么好的业绩。来自麦格里的两个问题，第一个问题是关于油田服务的。我们留意到在管理层的报告当中，公司在收入方面，油田服务有一个改善。一部分原因是由于新技术的引进，另一部分原因是因为使用了更好的工具。想了解一下，如何做一个对比，现在的收入以及三年前的一些收入是因为新技术的引进而实现的。第二个问题是关于利润率的问题。关于利润率的问题，我们留意到第二季度比第一季度的利润率有所提升，我们想了解一下，未来六到十二个月，或者是第三季度，管理层对于利润率的预计是怎么样？谢谢。
好，谢谢这个问题。关于公司的技术产品和技术的贡献，确实跟三年前比有一个大幅的改善。这主要归功于公司一直长期地对咱们技术的投入，研发一直坚持到现在，特别是在当前公司的自有技术的研发，到了一个稳定的产业化的收获期。
Thank you for your questions. Your first question about the revenue as well as about tools and the technologies. It's true that the company has been investing with a lot of resources in our R&D for new technologies, and we have also adopted a lot of new technologies compared with that of three years ago. Currently, it is actually our harvest season after so many years of investments in technologies.
我们还会继续加大我们的R&D的研发和完善我们的技术的产品。当前很多我们的技术能力已经达到业界高端的水平，主要现在公司还在加大这些技术产品产业化产能的建设。
The company will continue to putting more resources in R&D to perfect our technologies and enhance our technical capability. Currently, in terms of our R&D capability, we are among the 1st tier in the industry. We will definitely work harder to industrialize all those technologies to improve our capability.
正如刚才郑永刚先生介绍的，随着公司技术产品的产能的扩产建设，技术的贡献在未来几年还会发挥主导的作用。
Just as you may have heard from Mr. Zheng during his presentation, through our investments in the technical segment, we believe that new technologies will contribute more to our growth of the business in the upcoming years.
关于你提到的第二个问题，公司的装备的利用率现在一直处于一个非常高的水平，无论是跟同行比，还是跟公司的既往的历史比，是比较高的一个基数。
As for your second question about margin, let me talk about the equipment utilization rate. Currently, our utilization rate is among the high in the industry compared with our competitors as well as our own in the history.
公司还会遵循安全管理的原则，在下半年还会合理安排我们装备的合理的修理和保养的计划。
By following the principle of safety in our management, we will prepare a schedule for maintenance for all our equipment in the second half of the year.
最后，从公司目前所持有的合同来说，对下半年装备的使用率维持在一个较高水平还是有很信心的。
Looking at our backlog, we have confidence that we can maintain the utilization rate at a high level in the second half of the year.
好，谢谢。
Thank you.
Okay. Next question. The gentleman in white shirt, please.
Thank you. Neil Beveridge, Bernstein. Two questions. The first question is, there seems to be a pick-up in rig rates in the first half of the year versus a year ago, which seems slightly better than industry trends. Can you comment a little bit about what was driving that improvement in rig rates and whether or not you expect that to continue into the second half of the year? The second question is around your rig leasing business. Can you say how many rigs you've got under lease now? What you think is the potential to lease further rigs in the second half of the year and into next year, just given the sheer number of rigs coming onto the market in China, and just say a little bit about what the margins of those lease rigs are. Thank you.
两个问题。第一个问题是关于钻井平台方面，似乎整个上半年，整个钻井平台行业都有所回升，想了解一下到底背后是什么样的驱动力量，使得整个行业有所回升。第二个问题是关于平台的租赁方面的业务，能不能介绍一下公司的租赁业务在下半年有什么计划，在中国或者是在全球的平台租赁？谢谢。
好，谢谢您的问题。第一个问题请我们CEO曹树杰先生回答。
Thank you for your questions. Our CEO Mr. Cao will take the first question.
从上半年整个来讲，因为整个国家天然气上产计划，可能工作量在国内比去年有大幅的提升。这样子造成我们整个船的使用率的上升，包括我们新租些平台，满足一些需求。其实同时我们海外的业务也在提升。刚才说我们不光是国内提升，海外的业务量，整个供货量也在提升，也在增长。
In the first half, it's true that there's a pickup in the whole industry. Basically, it's because of the national plan. If you look at our utilization of our vessels and the rigs and all our services, there has been a pickup in all these areas, not only in China but also in our overseas markets.
另外，从整个这个，因为这个作业的区域不同，价格结构也不同，所以整个根据这个情况，区域情况，它可能价格上，整个来讲，相比讲必须也可能看得有点提升。
Of course, different operations areas may have different prices and the pickup also varies from one place to another.
对，整个的市场价格是比较稳定，就是这个不同的船的价格不一样，可能作业量不一样，导致我们这个价格也有变化。
Generally speaking, if you look at the overall market price, it is still basically the same. The difference only occurs in different vessels and the different areas and the different operations.
好，我来回答第二个问题。公司现在钻井装备的租赁情况是，公司现在自有39座各型的钻井平台。目前租赁外部资源13座。
Let me take your second question about the drilling rigs and leasing. Currently, we own 39 different types of drilling rigs, and we also lease 13 rigs from outsiders.
到目前为止，根据公司现在已经获得的合同，下半年我们如刚才所说，合理安排我们的一些平台的维修和检修。因此我们还会在下半年继续寻租新的装备资源。
As I said just now, we may have to arrange maintenance to some of the drilling rigs in the second half. Therefore, based on our backlog, all the total number of contracts we have, we may continue looking for more drilling rigs to lease them.
我们判断下半年还会继续增租外部资源数条钻井平台，还有六条船舶。
According to our own adjustments, we may continue to look for more external resources for leasing, including drilling rigs as well as six vessels.
这里再补充报告一下，其实我们在陆地钻机的land rig的方面，我们目前已经租赁有12座陆地钻机在使用。
One more piece of information for your reference. Currently we are leasing 12 land rigs that is onshore.
在当前这个行业整体比较低迷的情况下，公司利用外部资源对公司的发展质量是一个比较好的有益的补充。
Considering the low market currently, it is definitely a good supplementation for our business growth by utilizing external resources.
好，谢谢。
Thank you.
Thank you for the management. Any more questions? The lady in black. Yeah. Please. Thank you.
感谢管理层的精彩演示。我是来自美银美林的分析员思婷婷。我有两个问题，首先想问一下我们总体的成本控制，我看到公司尤其是在员工成本，还有在原材料成本方面的话，他们的增幅远小于收入成本的增幅，我想请问一下这是如何做到的？还有就是在分包成本方面的话，还是发展比较快。我想问一下，随着公司未来自有技术的投入使用，会不会减少一些对分包成本的这些需求？第二个问题是想问一下关于公司的投资收益，我看到公司在投资收益上今年增幅非常多，尤其是来自我们的wealth management products方面，收入增长非常多。想问一下这个是不是可持续性的？谢谢。
Two questions from Si Tingting. The first question is about cost control. We noticed that the growth of labor cost as well as raw material cost, both were below the increase of revenue. I just want to understand will this trend maintain the second half? The second question, meanwhile, another question followed by the cost control is on the outsourcing cost. Outsourcing cost has been increasing very quickly. How do you think about the demand for outsourcing in the future? Will it reduce because of more and more self-developed technologies being put into operations? The second question is about investment yield or investment returns. We noticed that the returns from investment grew rapidly and a lot of such growth was the form of wealth management. I just want to understand whether this kind of growth will sustain in the future. Thank you.
好，谢谢。第一个问题请我们曹先生回答，第二个问题请我们郑先生回答。
Mr. Cao will take your first question, and Mr. Zheng will take your second question. Thank you for your questions.
好，我先回答第一个问题，我们整个成本管控，因为成本一直是我们这个公司的管控的重点，就是低成本战略，控制好整个这个费用支出。这从几个方面，刚才说第一个材料方面，材料以前我们上次从几个方面，一个是加大这个机动采办的管控，包括机动库房的管理，随着动态监控整个的库房，包括我们加大了自修，员工海上一些设备的监测，这么保证整个材料消耗会在一个良好的水平。第二就是对分包成本，因为分包现在可能今年整个来讲，分包绝对是比去年在增加，因为今年我们增加了很多船去租赁，所以看着分包很多。但从技术上话一下，高端设备上，我们通过研发，我们自己的产品加大了投入，加大了研发的力度，达到了一定的水平，就是我们在高端这个自由的分包方面，比例占比会在逐步下降。因为我们的产品上来以后，整个外边分包的业务会在相应减少。在员工成本这方面，就是整个来讲，是因为从去年到现在，我们总的业务在增加，因为这个供货量大幅上升，所以我们员工成本在增加。但总的来讲，我们控制一下员工的用工模式，整个通过不同的用工模式，包括用工来减少我们整个，控制我们的综合的成本，这么一个达到最好的这个效果吧。大概就这么。
Regarding the first question about cost control. Cost control has been our focus in our data operations all these years, and it is also a strategic task for us. That's why we have been very stringent in controlling all the costs and expenditures. As for the material cost, we took active measures to control the procurement, and meanwhile, we also conducted dynamic controlling over our warehouses. A lot of our services were done by ourselves, for example, maintenance. Meanwhile, the cost utilization overseas were also stringently controlled and monitored. That's why we were able to reduce the material cost in the first half. As for the outsourcing cost and the demand, it's true that outsourcing cost increased because of more vessels were rented and there will be more leases in the future. It's true that the outsourcing cost increased.
However, through the implementation adoption of more and more self-developed technologies, particularly those high-end technologies, we believe that a lot of work will be done by ourselves instead of looking for a third party. Therefore, in the high-end technologies sector, there will be less need for outsourcing in the future. As for the labor cost, what you said is also correct, that there is an increase in labor cost in the first half. However, we have been trying very hard to control and even reduce the labor costs through different ways about labor utilization models in the future. Thank you.
补充一点，就是关于原材料的成本管控。公司已经从去年开始建设全球供应链。随着供应链建设的成熟，还会进一步帮助公司原材料成本的降低。
A quick comment on the cost control on raw material. Since last year, we started building up our own global supply chain. If this supply chain network is put into place, we will be able to control our material cost even better in the future.
Any more questions?
就刚才在说那个分包的时候，分成技术分包和装备分包，但是装备分包呢，其实正是体现了公司轻资产、重技术的战略，asset light战略。就是装备的分包，正是体现了公司轻资产的战略，asset light。
Another quick comment on the outsourcing cost. It's true that the company is turning itself into a light asset company, that's why there will be less need for equipment lease in the future.
说到投资收益呢，因为大家也都看到，我们的整个的公司净利润是9.86亿，那么归母应该是9.73亿，然后经营利润是7.95亿。这里的non-operating的这种的profit主要说来自于，比如说我们的保险理赔收入，包括我们的理财收益，还有包括我们的一些科研投入的一些补贴。这些我想强调的是，虽然是non-operating这种的income，其实也是可以持续的，它是recurring。
As for the returns of our investments activities in the first half, you may have noticed in our financial report that our net profit is CNY 986 million. Net profit attributable to the shareholders is CNY 973 million. The operating profit is CNY 795 million. If you look at the non-operating profit, it's true that some of the revenues are from our investment activities, including our investment in some R&D activities. We think that these returns and this revenue are sustainable because they are recurring activities.
公司每年的这些non-operating的这些基本都维持在这个水平。所以说这个不仅是可以持续到今年下半年，而且也会持续到明年后面，在长期的一段时间都会可以持续。
In terms of this kind of activities, they will continue in the second half, in next year and even in the upcoming years. That's why we believe that all these are sustainable.
Thank you for the management. Last question for today. The gentleman in the.
王宇澄：好，我是中银国际卢智澄。两个简单的问题。首先，上半年我们看见有些技术板块的收入增长得很快，那想请教一下管理层能不能给一个指引，比如说下半年或是全年的情况，能不能维持这种增速？第二点就是我们看见上半年业绩很好，但是我们的经营现金流是负数，能不能讲一下什么原因？而且这个公司觉得有没有信心全年经营现金流能变正？谢谢。
请问一下是净什么？是什么现金？
经营现金流。
经营现金流。Thank you。
Mr. Lu from BOCI, two questions. The first question is that we noticed that the revenue increased in different segments in the first half. I just want the management to share with us your guideline for the whole year revenue growth, and what will be your target of growth for the whole year? The second question is about operating cash flow. We noticed that it is negative in the first half, and just want to understand the overall operating cash flow for the whole year and also for the second half. Thank you.
行，我回答第一个问题，请郑先生等会回答第二个问题。公司的技术的贡献在上半年相比装备板块还是比较明显。公司现在管理层跟整个团队还是非常有信心继续延续这个发展势头。这也是郑银河公司的目前的战略，我们加大技术产品的贡献。从现在的试点，从咱们目前现有持有的合同来看，我们有信心还会至少保持这个增长的幅度。
Thank you for your questions. Let me take your first question regarding the target of growth for the whole year. In the first half, it is obvious that the equipment contributed a great lot to the revenue growth. Based on the backlog and all the contracts we are holding now, the management has confidence that the equipment and the technology will contribute more to the company in the second half. We have confidence that we can maintain the growth in the second half. Thank you.
我来回答第二个问题。那么第二个问题呢，大家从这个财报中也都看到了，我们的现金流在半年报中实际上是减少的，这里主要是由于应收账款的大幅增加。应收账款在增加的50几亿中呢，有大概47亿是来自于我们的有限公司。所以说呢，这个应收账款的回收，第一，这个是有保障的，这是第一点。
Let me take the second question about the negative operating cash flow. It's true that in our financial report, the operating cash flow, there was a reduction. This is mainly because of the dramatic increase in terms of account receivables. Among the CNY 5 billion account receivables, CNY 4.7 billion were from our limited companies. Actually all the collection of such account receivables are guaranteed.
另外第二点呢，就是今年呢，我们有大概47亿元人民币的长期债务变成短期债务，我们现在准备是用自有资金去偿还。所以我们现在目前的预测，年底的available cash比去18年年底会略有降低。
The second point I want to make is that CNY 4.7 billion of long-term debt are now converted into short-term debt. The company has decided to repay such debts by using our own cash. Therefore, at the end of the year, the cash available will also reduce accordingly.
One last question for today. Okay, gentlemen. In the suit please.
公司管理层好，我是来自摩根大通的莫雷。我有两个问题，第一个是关于日费率的，就是我们看到咱们的日费率在这个工作比较饱满的情况下还是有一个上涨，尤其是这个自升式平台的日费率，不知道公司管理层对接下来半年以及2020年的日费率的情况怎么看？第二个问题是关于公司净资产回报率的，就是在我们跟资本市场交流过程当中有一些长期投资者认为公司长期以来的净资产回报率是低于资本成本。我不知道公司管理层对这个怎么看。虽然我们今年上半年的净资产回报率有一个很大的改善，但是公司管理层对接下来几年是否有一个具体的目标？谢谢。
OK.
Two questions from Mr. Mo. The first question is about the daily rate. We understand that you have already got a very full schedule for the utilization of all equipment, particularly for those jackups. What will be the daily rate in next year, 2020? The second question about the net assets returns. For some long-term investors, your net assets returns has been below the capital cost for many years, even though there was improvement in the first half, however, it is still below the capital cost. What kind of improvement do you think that will happen in the second half of the year based on all your efforts?
好，谢谢。第一个问题请曹先生回答，第二个问题请郑先生回答。
Mr. Cao will take your first question, and Mr. Zheng will take your second question.
我回答第一个问题。价格可能大家会关注，为什么说上半年价格比去年同期在上涨？因为我们的船是钻井式，包括半潜式，这个船的机型不太一样，有的240、250，还有350、400的，它的价格是不同的。从整个趋势来讲，因为这个作业区域不同，作业环境不同，井深的不同，它用的船不一样，所以它的价格上来来讲它就不一样。整个平均来讲，可能我们几名高端船出租率去年上升了一部分，包括这方面的井，租的船也是高端平台，它的价格上来也高。所以平均起来是高，看上去比去年上涨还是高一部分。但整个来讲，这个价格是取决于市场供求、供需的平衡关系来决定的。对于明年情况怎么看，从现在看来还是一个市场来决定。我们每年有一个预算，根据整个市场状况，供求状况，还有甲方的需求，用什么的船，来决定明年的价格。但不管我们国内也好，国外也好，它都是一个统一的市场，是在一个市场上竞价之下决定大概什么状况，好吧。谢谢。
Thank you for your question. About the daily rate, it is true that there is some slight increase in terms of a daily rate. You understand that the price is also different in different locations and the different vessels as well as the different depth for wells, because there are 200, 250, 300, 400 and so on and so forth. Actually for those high-end vessels, the rate increased by average. Overall, the rate increased. Actually, all in all the rates are dependent on the demand and supply in the market. As for next year, it is all up to the market. Depending on the market situation, as well as what kind of vessels will be needed by our clients, then we will decide the price.
Domestic market and overseas markets are quite transparent to each other. The market factor will be the decisive factor in terms of a price.
关于第二个问题，就是关于净资产回报率。上半年虽然油服取得了不错的经营业绩，上半年的净资产回报率，在我印象中应该是2.8%左右。这个离正常的市场的风险回报还有一定水平。但是从公司管理层来看，我们有信心在未来几年让公司的净资产回报回归到一个正常水平。
Your second question about net assets returns, even though we delivered very good business performance in the first half and there was improvement in our net assets returns. However, we are still slow behind the industrial average. The management has confidence that in the upcoming years, we can take our net assets returns back to the right normal in the industry. Thank you.
我们会采取两种手段。第一个，从技术板块来说，我们会扩大技术板块继续的占比，提高技术板块的margin。另外，从装备板块来说，我们会通过这种租赁资产的扩大，来提高这种规模效应，来提高整个装备板块的净资产收益率。
One more comment about the specific measures. There are two things we can do. In terms of technical side, we will continue investing technology in order to improve the contribution from technology to our net assets returns. Secondly, from the equipment side, we will lease more equipment instead of building or buying. By large scale of leasing, we hope that it can also contribute to a better net assets returns.
行，我就第二个问题补充一下。刚才提供的数据，今年是半年的，如果把它放到全年的，其实这个水平跟资本市场还是比较接近的。第二，从我们跟全球的同行来看，我们的ROE在整个行业都遭遇低迷的时期，我们应该是比较好的一个水平。
I want to make two comments regarding this question. The first comment is that what you have seen from our financial report is only for the half year. If you look at the whole year, if we maintain this growth, definitely our net assets returns will be very close to the industrial level. Secondly, if you compare our performance with our competitor, with China Oilfield Services, actually all the players in the market, if you look at their ROEs, they are all low because of their low market. We believe that they will improve when the market turns better.
Thanks for the management again. Is there anything to add from the management?
[Non-English content]
Thank you very much for your coming. Yeah.
Thank you. I'm pleased to announce that today's presentation is successfully ended. Thanks again for joining us. Goodbye and have a nice day.