Ezion back in the black on fair value adjustments

Liftboat-focused Ezion Holdings returned to profitability in the second quarter mainly on fair value adjustments arising from its refinancing exercise.

The gains offset a gross loss from its operations.

Ezion posted a profit after tax of US$86.96 million (S$118.5 million) for the quarter ended June 30, reversing from a loss after tax of US$2.57 million for the same quarter a year ago.

Second-quarter earnings per share were 2.84 US cents, compared with a loss per share of 0.3 US cent for the same quarter the previous year.

Ezion's first-half profit after tax came in at US$40.55 million, compared with a loss after tax of US$15.3 million for the same period in FY17.

The company said it experienced continued delays in redeployment of its liftboats during the second quarter due to working capital constraints before the finalisation of the refinancing of its bank borrowings.

It also also saw a reduction in fleet utilisation for its jack-up rigs, tugs, barges and charter rates for its overall fleet.

Consequently, second-quarter revenue fell 65.7 per cent to US$23.13 million, and it resulted in a gross loss of US$10.91 million, reversing from a gross profit of US$6.69 million for the same period the previous year.

  • AT A GLANCE

  • REVENUE: 
    US$23.13 million (-65.7%)

    NET PROFIT: 
    US$86.96 million (not meaningful)

But the loss was more than offset by fair value adjustments of US$91.12 million resulting from the closure of a refinancing exercise, which had called for the issuance of convertible bonds and warrants to holders of notes and perpetuals.

Holders of these securities exercising equity swaps for the convertible bonds helped lift Ezion's asset value, the group said on the release of its first-quarter results in May.

The group had issued over 1.25 billion shares at 24.87 cents and more than 222.03 million shares at 27.63 cents during the second quarter to security holders exercising the equity swaps.

The group's second-quarter bottom line was also helped by higher other income, mainly on a foreign exchange gain due to the strengthening of the United States dollar against the Singapore dollar.

A version of this article appeared in the print edition of The Straits Times on August 10, 2018, with the headline 'Ezion back in the black on fair value adjustments'. Print Edition | Subscribe