Energy contractor Gaylin Holdings is making a fresh start by taking a $35.5 million provision on old inventory, a move that belted fourth-quarter numbers.
Net loss widened to $44.4 million from $6.3 million last year.
But the company also has more cash than debt for the first time in six years, it said yesterday.
With a reset cost base, newly injected private equity money and fresh management, Gaylin is aiming to ride what it sees is rising optimism about the global oil and gas market.
Revenue for the three months to March 31 fell 28.1 per cent to $15.5 million, as sales in the rigging and lifting segment dropped $5.8 million to $11.9 million.
Net losses rose from $11.4 million to $51.6 million for the full year.
The company made a significant provision for slow-moving and aged inventory in view of the downturn in the oil and gas industry. The provision was based on a review by professional valuers.
AT A GLANCE
REVENUE: $15.5 million (-28.1%)
NET LOSS: $44.4 million
If the provision was excluded, Gaylin would have reported a fourth-quarter gross profit of $2.5 million, a 10.4 per cent year-on-year decline. Gross profit margins for the fourth quarter would have improved to 15.9 per cent from 12.8 per cent a year earlier.
Losses per share for the fourth quarter were 6.13 cents, from losses per share of 1.43 cents a year earlier, while net asset value per share was 6.08 cents, down from 21.44 cents as of March 31 last year.
"The provision will reset Gaylin's inventory cost base and allow Gaylin to be more competitive in pricing," the company said.
Despite the net loss, Gaylin has strengthened its cash position over the past year, mostly on the back of a $68 million equity injection by private equity firm ShawKwei & Partners.
The company extended the maturity of its existing debt through a restructuring exercise.
Cash and cash equivalents grew to $57.8 million as of March 31, from $6.6 million a year earlier.
Cash surpassed total debt by $700,000 , compared with a deficit of $76.4 million. That was the first time that the company had a positive balance since 2012, it said.
The strengthening of the balance sheet has come amid a number of changes at Gaylin. Last month, it appointed a new chief executive and a new global managing director, while in March it announced plans to buy industry peer Amos International Holdings.
Gaylin noted increasing optimism in the global oilfield service market amid oil prices that have risen from below US$30 a barrel in 2015 to about US$75 now.
"The new equity investment, the debt restructuring and the new management team will provide financial stability, improve market competitiveness and strengthen Gaylin's abilities in its major markets," executive chairman and ShawKwei managing partner Kyle Shaw said in a statement.
Gaylin shares closed down 0.4 cent, or 4.4 per cent, to 8.6 cents yesterday.