Offshore support vessel provider PACC Offshore Services Holdings (Posh) has suffered a 49 per cent dive in second-quarter earnings to US$6.1 million (S$8.4 million) as vessel rates continued to come under pressure from the oil industry slump.
This was despite a 22 per cent increase in revenue to US$71.02 million for the period ended June 30.
The hit to the bottom line came on the back of a 71 per cent plunge in other operating income to US$1.9 million, chief financial officer Thai Kum Foon told a teleconference yesterday.
The company said it had a healthier share of profits from joint ventures of US$3.3 million, compared with US$300,000 the year before, on higher contribution from its Posh Terasea joint venture.
The increase in revenue was driven mainly by a 182 per cent gain in turnover for the offshore accommodation segment, which received full maiden contributions from a semi-submersible accommodation vessel and a light construction vessel.
AT A GLANCE
US$71.02 million (+22%)
US$6.1 million (-49%)
But turnover for the group's core offshore support vessel segment slid 5 per cent to US$31.5 million on lower charter rates and a utilisation rate of 79 per cent.
Net profit for the half year plunged 87 per cent to US$6.1 million, while revenue rose 16 per cent to US$128.6 million.
Earnings per share for the quarter came in at 0.34 US cent, down from 0.68 US cent a year earlier, while net asset value per share was 65.92 US cents as at June 30, down from 66.69 US cents as at Dec 31.
The group said oil prices are likely to stay volatile in the coming quarters and that pressure on rates will continue, given the high availability of vessels. "But we expect oil prices to recover in the longer term as consumption increases over time," chief executive Gerald Seow told the briefing.
To position the company for the sector's recovery, market penetration into key markets, including the Middle East and East Africa, has been accelerated, he said.
Mr Seow added that the group's business prospects remain positive. Its semi-submersible accommodation vessel Posh Xanadu, for instance, has recorded 100 per cent uptime operational performance in Brazil.
It has also received a work schedule from Petrobras for the next two years, although Posh has yet to agree to the extension.
A similar vessel, Posh Arcadia, is in talks for potential charters to begin early next year, while Posh Enterprise, another semi-submersible accommodation vessel, is set to commence its five-year charter starting next week.
Posh shares closed three cents or 8 per cent lower at 34.5 cents.