Transfield Services

Transfield Services Ltd.

Type	Publicly listed corporation
Industry	Infrastructure maintenance services
Founded	1998
Founder(s)	Franco Belgiorno-Nettis AC
Headquarters	North Sydney, Australia
Area served	Australia, Canada, Chile, New Caledonia, Philippines, India, New Zealand, United Arab Emirates, Qatar, United States
Key people	Diane Smith-Gander (Chairman) Guido Belgiorno-Nettis AM Luca Belgiorno-Nettis AM Graeme Hunt (MD & CEO)
Services	Operations, maintenance, and asset and project management services
Revenue	A$3.208 billion (2011)[1]
Operating income	A$3.295 billion[1]
Net income	(A$20 million)[1]
Total assets	A$2.267 billion[1]
Total equity	A$1.124 billion[1]
Employees	24,000
Subsidiaries	APP, Broadspectrum, Easternwell, ICD, Hofincons Infotech and Industrial Services
Website	http://www.transfieldservices.com/

Transfield Services Ltd. (ASX: TSE) is an Australian publicly listed corporation providing operations and maintenance, asset management, project and capital management outsourcing and infrastructure development services to the resources and industrial, infrastructure services and property and facilities management sectors. The company operates in Australia and New Zealand, the Americas and the Middle East and Asia (comprising the United Arab Emirates, Qatar, New Caledonia, Malaysia, Philippines and India).

Overview

Transfield Services operates across diverse industries, including mining and process, hydrocarbons, transport (including road, rail and public transport), utilities (including water, power, and telecommunications), facilities management and defence. Transfield Services's clients include major national and international companies, as well as all levels of government.^[2]

Controversy

In January 2014 in a statement to the Australian Stock Exchange, Transfield Services announced it would be responsible for support and welfare services on Nauru and Papua New Guinea's Manus Island. This development was criticised by refugee groups on the grounds that duty to shareholders conflicted with provision of welfare services.^[3]

History

The origins of Transfield Services Ltd. commenced in 1956 when Transfield Pty. Ltd. was founded by an Italian born engineer, Franco Belgiorno-Nettis, who was joined soon thereafter by his former engineer colleague at EPT, Carlo Salteri. Together they built one of Australia's most successful companies focused on major engineering projects, such as bridges, tunnels, dams, hydro-electric and coal power stations, oil rigs, concert halls, sugar mills and power lines. Included in their list of major achievements are the construction of the Gateway Bridge in Brisbane and the Sydney Harbour Tunnel. By the early 1980s, Transfield had in excess of 3,000 employees and an annual turnover of A$350 million; and within five years grew to the point of being the biggest engineering firm in south-east Asia. The company acquired the Williamstown Dockyard in Melbourne and, in 1989 after winning a A$6 billion contract to build ten ANZAC class frigates for the Australian and New Zealand governments, the largest defence company in Australia.^[4][5] When visiting Australia in 1986 Pope John Paul II toured the Transfield factory located at Seven Hills.^[6]

First known as AMECON, then as Transfield Defence Systems, the company re-established a naval shipbuilding capability in Australia with the successful construction of two FFG7 - Oliver Hazard Perry class frigates for the Royal Australian Navy. It was later awarded the Anzac Ship Project contract,^[5] for 10 Anzac class frigates, eight for the Royal Australian Navy and two for the Royal New Zealand Navy.

In 1989, Salteri and Belgiorno-Nettis stood down as joint managing directors of Transfield Holdings (as the company was then named) in favour of their eldest sons, Paul Salteri and Marco Belgiorno-Zegna.^[7] However, in a dispute between Salteri and Belgiorno-Nettis in 1995, the differences between the two families became irreconcillable and Transfield, then valued at A$733.2 million was split in two.^[4] The Belgiorno-Nettis family kept the name Transfield, having earlier established Transfield Holdings’ Operations and Maintenance division in 1993 at Mobil Altona in Victoria. In 2001, the division was listed on the Australian Securities Exchange as Transfield Services Ltd.^[8]

Current operations

As a private investment and development company, Transfield Holdings retains a shareholding in Transfield Services. Its joint managing directors, Guido and Luca Belgiorno-Nettis, were both directors of Transfield Services Ltd., until 2012. The two businesses have similar logos and are often confused, but are separate legal entities.

In June 2007, Transfield Services Infrastructure Fund was floated, comprising seven former Transfield Services assets; and later that year, the company acquired four wind farms.^[8]

In April 2009, Transfield Services announced the appointment of Dr Peter Goode as managing director and chief executive officer, succeeding Peter Watson, who had been CEO since the company was listed on the ASX. Goode, born in South Australia, was a former senior executive with US–based oilfield services multinational Schlumberger, and the former Group President and CEO of Vetco. He stated that his strategy is to move Transfield Services into higher margin sectors, particularly providing maintenance services to the oil and gas sector.^[9]

As part of this strategy Transfield Services acquired privately owned Australian well-servicing business Easternwell in December 2010 for A$575 million. Easternwell provides services to the mining, oil and gas and infrastructure sectors in Queensland, South Australia and Western Australia.^[10][11]

In July 2011 Transfield Services sold its North American based facilities management business USM to Emcor for US$255 million (A$240m),^[12] and also announced the sell down of 80 percent of its share in the Transfield Services Infrastructure Fund to Ratchaburi Australia, a subsidiary of Thai company Ratchaburi Electricity General Holding PLC. In announcing the sale, Transfield Services Infrastructure Fund said it would book an A$12.2 million loss on its investment.^[13][14]

The retirement of the Belgiorno-Nettis brothers from the Board, the sons of the company's founder, took place in early August 2012 - with both stating they wanted to concentrate on philanthropic and community interests. The number of Transfield Holdings seats on the Board was reduced to one, with Roy McElvie a former Private Equity and Investment manager being appointed in the brothers' place. McElvie has since resigned ad Chief Executive of Transfield Holdings, but retains a seat on the Transfield Services Board.

On 29 August 2012, concurrent with announcing its full year results, the company also disclosed that Peter Goode had resigned as MD and CEO to take up a position with Arle Capital Partners Ltd, a London based private equity firm, effective 30 September. Transfield Service's board of directors announced the appointment of Graeme Hunt as Interim MD and CEO, and later confirmed his appointment at the company's annual meeting on 1 November. Hunt signalled a review of the businesses portfolio of operations, announcing at the company's half year results on 26 February 2013 that it would divest the Marine Geotechnical and Mining Exploration Divisions of the Easternwell business, as well as the majority of the company's Middle East and Asia operations.

On 2 September 2013, the company announced that Chairman Tony Shepherd would not be seeking re-election and independent Director Diane Smith-Gander had been elected to lead the Board, effective from 24 October.

The company announced it was exiting the New Zealand hydrocarbons market on 22 October 2013 and selling its 50 percent share in its Transfield Worley joint venture for $30 million to current joint venture partner Worley Parsons. Transfield Services said money from the sale would be used to pay down debt.^[15]

Philanthropy

Transfield has had a longstanding commitment to the arts in the community. The company's involvement began when Franco Belgiorno-Nettis launched the Transfield Art Prize. Commonly known in art circles as the ‘Transfield’, the prize has become one of Australia’s major annual arts events. Since 1983, Transfield has also supported the Biennale of Sydney; now one of the premier activities in the Australian arts calendar. In 2014 this sponsorship drew criticism as being inappropriate given Transfield's involvement in the mandatory detention of asylum seekers.^[16] In the 1990s Transfield began supporting the Australian Chamber Orchestra.^[17] Both of these sponsorships have been continued by Transfield Holdings, separate from the Services business. Transfield Holdings and the Belgiorno-Nettis family have also had a long association with the Art Gallery of New South Wales and donated A$4 million in 2007 to enable the creation of the Franco & Amina Belgiorno-Nettis & family Contemporary Galleries.^[18]

The Transfield Foundation, a joint venture between Transfield Holdings and Transfield Services was created in November 2010. The Foundation provides philanthropic support for innovation in employment and education, resources management and the arts across Australia.

References

External links

• Transfield Services Ltd. website
• Transfield Holdings website
• Transfield Foundation website