Swiber sinks US$1.3 million into the red in Q1 from fewer contracts, absence of one-off gain

SINGAPORE - Mainboard-listed Swiber Holdings on Thursday reported that it has tumbled into the red, with a net loss of US$1.3 million (S$1.72 million) for the first quarter ended March 31, 2015, from a net profit of US$48 million a year ago.

The provider of engineering, procurement, installation and construction (EPIC) services for the offshore oil & gas industry said the loss was due mainly to the depletion of the group's order book last year, and the absence of a US$95.1 million gain from the disposal of a group of subsidiaries which bolstered earnings a year ago.

Reflecting the slimmer pipeline of projects, revenue fell 17.3 per cent to US$164.9 million compared to US$199.5 million a year ago. Revenue from Latin America, contributed 69 per cent, or US$113.8 million, with the balance coming from East Asia, South Asia, Southeast Asia and other markets.

The share of profit from associates and joint ventures fell 51.5 per cent to US$4.8 million as a result of lower contribution from the Indonesia associates.

Looking ahead, the company said it expects new contract awards to contribute to a turnaround as business momentum picks up.

Said deputy group chief executive officer Darren Yeo: "We had a difficult first quarter which was expected given the smaller pipeline of contracts last year. With our pipeline now standing at a record US$1.8 billion, we believe we are well positioned for a strong turnaround especially in the second half.

"We are working hard at maintaining the momentum of new awards and are cautiously optimistic that we will continue to gain traction in the coming months."

In December 2014, Swiber was awarded a US$710 million EPIC project in West Africa, a new market for the group. Since the beginning of 2015, it has won three contracts for EPIC services in India of more than US$800 million.

Swiber believes the weaker global oil prices will have a smaller impact on shallow water field development and production activities - areas which Swiber's EPIC caters to - compared to the more vulnerable exploration stage of the oil and gas value chain.

"In view of these factors, the group believes its business would be less affected by the industry's expenditure cuts and that it is in a better position to capitalise on future bidding opportunities," Swiber said.

Loss per share for Q1 was 0.2 US cents against an earnings per share of 7.9 US cents a year ago. Net asset value per share fell to 61.8 US cents from 90.6 US cents.

No dividend was declared.