SINGAPORE - Lifeboat company Ezion Holdings reported on Thursday (Aug 11) a 31.5 per cent fall in net profit to US$19.8 million (S$26.5 million) for the second quarter ended June 30, from US$29 million in the year-ago quarter.
Revenue declined 7 per cent to US$83.7 million from US$90.1 million a year ago due to several service rigs undergoing modifications and routine class surveys.
Ezion saw a net other income gain of US$15.3 million in the quarter, mainly from a gain on disposal of assets held for sale, compared to US$962,000 a year ago.
But the cost of sales and servicing also increased by 12.4 per cent, or US$7.3 million to US$65.9 million, due to the deployment of additional service rigs.
Looking ahead, Ezion warns it expects strong headwinds to continue into the second half of the year.
"The industrial environment remains very challenging in view of the low fossil fuel prices and the cut back in expenses from oil majors," it said.
It also said that the gross proceeds of about S$138.8 million just raised in a rights issue will place it in a better position to focus on supporting clients "that are relooking... some of the extraction and production activities".
It added that management is also working hard to complete the repairs and modifications of several of its service rigs to ensure they can return to work before the end of the year.