PACC Offshore's net loss widens in Q4

PACC Offshore says it will continue to manage costs, adding that two of 12 vessels under a contract with an oil major in the Middle East have begun charter, with the other 10 vessels to be deployed progressively this year.
PACC Offshore says it will continue to manage costs, adding that two of 12 vessels under a contract with an oil major in the Middle East have begun charter, with the other 10 vessels to be deployed progressively this year.PHOTO: PACC

Result comes on the back of charges for impairments of fixed assets and goodwill

Losses widened at offshore marine services provider PACC Offshore Services Holdings (Posh) in the fourth quarter on the back of charges for impairments of fixed assets and goodwill.

Its net loss came in at US$345.4 million (S$490 million) for the three months to Dec 31, compared with a net loss of US$149.7 million in the same period a year earlier.

Excluding impairments and goodwill, the operational net loss was US$35.3 million, compared with US$1.2 million the previous year.

Revenue slumped 49 per cent to US$36.7 million, owing to lower usage and charter rates across all major business segments.

Posh said yesterday: "Market conditions in the offshore marine sector continued to deteriorate and this negatively affected the results."

Revenue from the offshore supply vessels unit fell 51 per cent to US$16.7 million in the quarter, hurt by discounted rates on existing contracts and reduced rates for new ones.

  • AT A GLANCE

    REVENUE: US$36.7 million (-49%)

    NET LOSS: US$345.4 million (+131%)

Turnover in the offshore accommodation segment dropped 56 per cent to US$11.8 million, again mainly on lower charter rates and less use of its shallow-water vessels. The segment registered a gross loss of US$2.2 million.

Finance costs increased 55 per cent, owing to higher loan balances and interest rates in the quarter.

Posh logged a net loss of US$371.4 million for the full year, up from US$131 million previously, while revenue fell 35 per cent to US$183.1 million. The firm said: "The outlook for the oil and gas sector continues to remain depressed and the timing of recovery is uncertain.

"While Opec (Organisation of Petroleum Exporting Countries) had reached an agreement to cut oil production in November last year, supply and demand balances are still slow to return to equilibrium."

The firm said it will continue to manage costs, adding that two of 12 vessels under a contract with an oil major in the Middle East have begun charter, with the other 10 vessels to be deployed progressively this year.

Posh chief executive Gerald Seow said: "While our financial performance was impacted by the persistent weakness in the oil and gas services industry, our strong balance sheet and ability to continue generating positive operating cashflow in the 2016 financial year reflect our underlying operational resilience."

Quarterly losses per share were 19.06 US cents, up from 8.25 US cents previously. Net asset value per share was 37.98 US cents as of Dec 31, down from 58.53 US cents the same time the year before.

Posh shares closed 1.5 cents down at 36.5 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on February 22, 2017, with the headline 'PACC Offshore's net loss widens in Q4'. Print Edition | Subscribe