SINGAPORE - Emas Offshore sank into the red for the fourth quarter, posting a net loss of US$98.5 million (S$137.2 million) from net profit of US$36.3 million in the year-ago quarter.
This brings the full-year loss to US$265.3 million (S$369.5 million) from a profit of US$199.5 million a year ago, the offshore oil and gas services provider said in a filing with the Singapore Exchange on Sunday evening (Oct 30).
Emas took a US$56 million charge on its shares in associate company Perisai Petroleum Teknologi Bhd. It also wrote off US$12.2 million deposits paid for vessels under construction, while warning of more choppy waters ahead.
"Due to the weakness in the oil and gas sector as well as the oversupply in the offshore oil and gas support industry, the group may need to make further impairments which have yet to be determined," Emas warned.
"The group is undertaking a comprehensive impairment assessment based on various factors and events and will make the relevant disclosures as required."
The group's total liabilities increased by US$44.2 million to US$1 billion as at Aug 31, 2016.
Emas said that it has reached in-principle agreements with the substantial majority of its principal bankers on the refinancing of its financial obligations.
It is also in the process of finalising agreements to provide additional working capital facilities, with these expected to be concluded before the end of the first quarter of FY2017.
It said that with the requisite number of principal bankers in agreement to the finalised refinancing package, the net current liabilities position is expected to be resolved upon the expected completion of the refinancing package.
Said Captain Adarash Kumar, Emas Offshore's chief executive officer: "The market continues to paint an extremely challenging landscape for the group. amidst this, one bright spot for the group is that we are starting to see signs of stabilisation in utilisation rates though daily charter rates are expected to remain depressed for a considerable period of time.
"Looking ahead, we believe that FY2017 will continue to be an extremely challenging period for the group. However we remain on track on the initiatives we have implemented to strengthen our financial position and conserve cash."
In terms of geographical expansion, Captain Kumar said West Africa continues to be a strategic market for the group.
"In anticipation of new business engagements, we intend to deploy more vessels in West Africa and also increase our presence in India," he added.