SINGAPORE - Offshore services group Ezion Holdings swung to a US$12.7 million(S$17.9 million) net loss for the first quarter from a net profit of US$15.5 million for the same period a year ago.
Revenue for the three months to end-March 2017 fell 16.4 per cent to US$68.6 million from US$82.1 million a year ago due to weaker charter rates and lower utilisation rates of its service rigs and offshore support vessels.
Ezion also suffered a decrease in other income, mainly due to the absence of the gain on disposal of asset held for sale in the year-ago quarter.
Its other operating expenses includes unrealised foreign exchange losses amounting to approximately US$13.3 million, mainly due to the strengthening of the Singapore dollar against the US dollar as at March 31, 2017, which resulted in foreign exchange losses on the group's notes payable.
Looking ahead, Ezion said the operating environment in the marine and offshore oil and gas industry remains very challenging.
"Fossil fuel prices have again shown weaknesses in the recent weeks," said the company. "In addition, despite clients' new requirement for the group's asset and services, the rates remain depressed."
While not expecting the charter rates for its fleet of service rigs and offshore support vessels to recover quickly, Ezion said it is working hard to improve the utilisation rate of its fleet in the second half of the year.
In the process of attempting to put more assets into work through modification and upgrading or through new service rigs, the group will endeavour to match the capital expenditure to its cashflow.
While plan of disposal of certain assets faces difficulties due to challenges faced by potential buyers in securing debt financing, the group is working with potential partners on co-ownership of some of its assets to better deploy the assets and to strengthen the group's balance sheet, Ezion added.