Emas Offshore Q4 earnings jump 181% to US$36.3m

SINGAPORE - Mainboard-listed Emas Offshore sold and leased vessels to help it record a 181 per cent surge in net profit to US$36.3 million (S$50.4 million) in its fourth fiscal quarter ended Aug 31 from from US$12.94 million in the year-ago period.

The offshore services firm said on Tuesday (Oct 20) that revenue fell 19 per cent to US$54.3 million in the fourth quarter, mainly due to weakness in both the shallow water platform support vessels and anchor handling, towing and supply vessels segments.

But Emas boosted its other operating income with a gain from sale of vessels and leaseback transactions totalling US$32.8 million.

For the full year, earnings soared 626 per cent year-on-year to US$199.54 million, although revenue fell 13 per cent to US$247.17 million. This was due to the effect of a US$154.7 million negative goodwill arising from the completion of the business combination of EOC Limited and EMAS Marine on Oct 3, 2014.

Said Captain Adarash Kumar, Emas Offshore's chief executive officer: "As global concerns continue to affect the oil and gas services providers, we expect the near term pressure to continue. The group is likely to experience an intense price competition on its charter rates and a tapered rate for its vessel utilisation. This will inevitably have an impact on the group's operating and financial performance."

"However, we continue to adopt measures to strengthen our balance sheet and conserve cash. We are focused on opportunities for our offshore assets and accommodation and support services, and barring any major long-term disruption, we will be able to benefit from an eventual upturn."

Additionally, the company announced on Tuesday that it has won contracts valued at US$33 million for work in West Africa and Asia. It said the contracts awarded are part of its strategy of focusing its efforts in West Africa where offshore activities remain healthy.

"In the face of significant volatility and weakness in the oil price environment, we have taken further steps to reduce costs, targeting a further reduction between 10 and 20 per cent on vessel cost and general administrative expenses," said Capt Kumar.

"We will continue to streamline the fleet, potentially looking to dispose of smaller tonnage vessels and strengthening the balance sheet through monetisation of certain assets. In addition, we have been implementing initiatives to improve operational efficiency and increasing our focus on vessel utilisation as we leverage synergies with Ezra Group to win tenders globally."

Emas Offshore, which is also listed in Oslo, said its earnings per share rose 79 per cent to 0.08 US cent for the fourth quarter from 0.05 US cent a year ago. Its net asset value per share fell to US$1.22 as at Aug 31 this year from US$2.84 the previous year.