Ezra bags A$130 million contract, announces profit jumps over 7 times on one-off gain

Mainboard-listed Ezra Holdings on Friday announced that its subsea services division, Emas Amc, has secured a subsea construction contract with Australia's Apache Energy Limited for over A$130 million (A$140.21 million).

Project management and engineering is to commence immediately with offshore execution scheduled to start in the first quarter of 2016, utilising the company's heavy lift and multi-lay deep water offshore construction vessel, the Lewek Constellation.

The new project award follows the recently secured multi-year North Sea frame agreement and the completed installation works for the Coniston Field Development Project in north-west Australia, said Ezra group chief executive officer and managing director Lionel Lee.

Ezra, a provider of integrated offshore solutions to the oil and gas industry, also announced on Friday that its net profit for the first quarter of its 2015 financial year ended Nov 30, 2014, jumped 7.57 times to US$54.4 million (S$72.79 million).

This was largely due to a US$106.3 million one-off gain from the acquisition of subsidiaries and a foreign exchange gain of US$9.4 million, versus a foreign exchange loss of US$2.7 million for the year-ago period.

The increase was partially offset by the US$42.3 million one-off loss on step up of associated and joint venture companies to subsidiaries and a one-off impairment of fixed assets of US$10 million.

Revenue for the 1QFY15 fell 6 per cent to US$321 million as contributions from its subsea services division fell US$22.1 million and revenue from its offshore support and production services division slumped US$18.7 million. The decrease was partially offset by a US$22 million gain from its marine services division.

"The recent decline in oil prices has affected the global capital markets, but we believe that the long-term fundamentals of the oil and gas industry remain encouraging and that this is expected to drive the continued spending in segments that Ezra operates in," commented Mr Lee.

"Despite the current headwinds faced by the oil and gas industry in the midst of a lower oil price environment, we are not seeing a slowdown in tendering activities, especially in the Gulf of Mexico and West Africa. By March 2015, we will see the delivery of our flagship vessel, Lewek Constellation, an ice-classed vessel that is one of only two in the world. This will strengthen our credentials, especially in the areas of subsea tiebacks and SURF," said Mr Lee.

The company said it has secured a healthy backlog of approximately US$2.5 billion, with majority of the contracts expected to be executed over the next 12 to 18 months. Additionally, Emas AMC had won a project with Apache to deploy the Lewek Constellation for work in Australia, worth some US$105 million.

For the three months ended Nov 30, 2014, Ezra's earnings per share stood at 5.58 cents while net asset value per share was 139.39 cents. No dividends were declared for the quarter.