PACC Offshore posts 27% drop in earnings

SINGAPORE - Lower utilisation of its vessels and higher operating costs has dragged earnings down for offshore support vessel owner PACC Offshore Services Holdings (Posh) last year.

The mainboard-listed group logged a net profit of US$53.2 million (S$66.5 million) for the 12 months to Dec 31, down 27 per cent from previously.

Revenue, however, kept stable at US$234 million, dipping just 1 per cent dip from a year ago, against "a backdrop of a challenging operating environment impacted by the sharp decline in oil prices".

Still, Posh proposed a final dividend of 1.5 Singapore cents per share for the year, which represents a cash payout of 38 per cent.

Earnings per share for the 12 months ended Dec 31 came in at 3.1 US cents, down from the 4.95 US cents the year before, while net asset value per share as at Dec 31 stood at 66.69 US cents, up from the 58.30 US cents previously.

Joint ventures failed to deliver for Posh last year with a loss of US$13.6 million, including the US$20.8 million loss from its Mexican operations.

"The sharp decline in oil prices since the middle of 2014 has forced oil majors and national oil companies to cut back on capital expenditure and that is putting pressure on charter rates," said Posh chief executive Gerald Seow.

But he believes the group's fleet, which is diversified and relatively young, will "remain competitive in the challenging market". Its move into the floatel sector is also "timely" as its vessels will support production and maintenance activities.

"With oil price volatility and uncertainties in the global economy, the group will focus on cost efficiency and maximise utilisation of its vessels," said Mr Seow, adding that Posh is "taking steps to reduce operating expenses wherever possible".

"The climate is challenging but we are confident that Posh is able to navigate through and weather the difficult industry conditions."

Posh shares closed half a cent down on Tuesday at 53 Singapore cents.