PACC Offshore posts $211m loss in Q4

PACC Offshore Services Holdings operates a fleet of 112 vessels, including joint ventures. Chief executive Gerald Seow told a tele-briefing yesterday that he believes the industry is "more or less at the bottom of the market", as Opec discusses freez
PACC Offshore Services Holdings operates a fleet of 112 vessels, including joint ventures. Chief executive Gerald Seow told a tele-briefing yesterday that he believes the industry is "more or less at the bottom of the market", as Opec discusses freezing crude production levels.PHOTO: PACC

Figure down from same period a year ago due to impairment charges amounting to $209m

Offshore marine services provider PACC Offshore Services Holdings (Posh) widened its losses during the fourth quarter as it took charges for impairments amounting to US$148.4 million (S$209 million).

The group reported yesterday a net loss of US$149.7 million (S$211 million) for the three months to Dec 31, up on the net loss of US$9.6 million in the same period a year ago.

Excluding impairments, write- offs and disposals, the net loss of US$2.7 million was an improvement on the net loss of US$8 million previously. Revenue expanded 29 per cent to US$71.8 million on the back of a 297 per cent surge in contribution from the offshore accommodation segment.

The strong performance came primarily from the chartering of the Posh Xanadu semi-submersible accommodation vessel and three light construction vessels, said the group, which operates a fleet of 112 vessels, including joint ventures.

Posh logged a net loss of US$131 million for the full year, a reversal from the net profit of US$53.2 million previously, while revenue rose 20 per cent to US$280.8 million.

  • AT A GLANCE

  • REVENUE: US$71.8 million (+29%)

    NET LOSS: US$149.7 million (N.A.)

    DIVIDEND: 0.5 cent a share (-66.7%)

It would have chalked up a net profit of US$13.6 million over the US$9.7 million previously if it excluded the one-off charges.

Losses per share for the quarter came in at 8.25 US cents, more than the 0.55 US cent previously. Net asset value per share was 58.53 US cents as at Dec 31, down from the 66.69 US cents at the same time the year before.

Posh has proposed a final dividend of half a cent per share, just one-third of the 1.5 cents previously.

Chief executive Gerald Seow told a tele-briefing yesterday that he believes the industry is "more or less at the bottom of the market", as Opec discusses freezing crude production levels.

Still, he expects both charter and utilisation rates to continue to "face pressure" amid the weakness in oil prices. "Our strategy of diversification has put us in a good position... especially (for opportunities) in the Middle East," added Mr Seow, hinting that the group may "deliver some good news" in relation to its venture there next week.

Posh announced last month that it has entered into a joint venture with Saudi Arabia's Hmood Al-Khalaf Group as part of its plans to expand its presence in the Middle East and grow further in the Persian Gulf, which has been identified as a key growth market.

Mr Seow also said that Posh will remain focused on "resetting our cost base in order to match what is happening with our clients".

The group has reduced its crew headcount, comprising foreign contract workers, by less than 80 in the past year, while trimming salaries and imposing a pay freeze for the management - all of which is expected to chalk up "about US$10 million in savings" this year, he noted.

Posh shares closed one cent or 3.4 per cent down at 28 cents yesterday, before the results were announced.

A version of this article appeared in the print edition of The Straits Times on February 20, 2016, with the headline 'PACC Offshore posts $211m loss in Q4'. Print Edition | Subscribe