Ezion profit falls 62%, Pacific Radiance swings to US$6.9m loss, Nam Cheong sinks RM40m into red

SINGAPORE - Three companies in the offshore and marine sector announced results on Thursday (May 12) that underlined the challenging conditions faced by the industry.

Ezion Holdings reported a 62 per cent fall in net profit to US$15.5 million (S$21.2 million) for its first quarter ended March 31 from US$41 million in the year-ago period.

Revenue fell 8.9 per cent to US$82.1 million due to the absence of contribution from projects in Queensland, Australia, that did not go as originally planned, and a few service rigs that underwent modifications and routine class surveys.

Looking ahead, Ezion said the operating environment is expected to remain difficult in view of the depressed state of the offshore oil and gas and marine sector. It said the group will focus on and expedite putting several of its assets back to service and will also be working on deploying a few other assets for alternative use to minimise the impact.

Vessels operator Pacific Radiance slid into the red with a US$6.9 million net loss in the first quarter from a US$2.7 million net profit a year ago.

Revenue fell 42 per cent to US$18.4 million due to the decline in revenue of its subsea business and offshore support services business. This was blamed on "the significantly weaker market conditions arising from the severe drop in oil prices".

Malaysian support vessel builder Nam Cheong said its loss widened to RM40.1 million (S$13.6 million) for its first quarter ended March 31 from RM39.3 million a year-ago.

Revenue for first quarter was a negative RM93.1 million versus RM326.3 million a year ago as its shipbuilding segment suffered a negative turnover of RM97.1 million. This was mainly due to the reversal of revenue from Perdana Petroleum Bhd's cancellation of an accommodation work barge in which construction was in advanced stage and a lower number of vessel deliveries. The chartering segment continued to record a gross loss due to lower utilisation rate of vessels.

Nam Cheong said the outlook for the offshore marine sector remains weak and it anticipates that the progress of vessel sales and shipbuilding to remain slow.

The company said it has deferred the schedule of deliveries of its vessels currently under construction, both at customers' requests and also at its initiative.

The group has a gross order book of approximately RM1.1 billion as at March 31, 2016, comprising a mix of OSVs due for deliveries up till 2018.

No dividend was declared by the three companies.