Swissco reports $418m loss in third quarter

Swissco said there was no revenue derived from its drilling division due to the idling of two wholly owned rigs and two 50 per cent owned rigs. It is set to file for interim judicial management in the next few days.
Swissco said there was no revenue derived from its drilling division due to the idling of two wholly owned rigs and two 50 per cent owned rigs. It is set to file for interim judicial management in the next few days.PHOTO: SWISSCO HOLDINGS

Oilfield vessel operator pulled under mainly by impairment charges on rigs and vessels

Swissco Holdings, poised to file for interim judicial management, disclosed late on Monday that it suffered a US$296 million (S$418 million) net loss in the third quarter, reversing from a US$11.2 million profit a year ago.

The oilfield vessel operator was pulled under mainly by recognition of huge impairment charges on its rigs.

Its US$181 million of impairment losses for the three months to Sept 30 are made up of US$153.6 million on rigs and vessels and US$27.4 million on receivables and a loan to a joint venture.

Share of results of associates and joint ventures swung to a loss of US$107.3 million from a year-ago profit of US$10.7 million due to impairment losses on rigs.

Revenue for the quarter tumbled 63.5 per cent to US$3.8 million. Swissco said there was no revenue derived from its drilling division due to the idling of two wholly owned rigs and two 50 per cent owned rigs.

It had also not received charter collections since September last year from three joint-venture rigs with Ezion Holdings.

  • AT A GLANCE

  • NET LOSS: US$296 million (change not meaningful)

  • REVENUE: US$3.8 million (-63.5%)

For the nine months ended September, net loss stood at US$299.9 million compared with a net profit of US$46 million in the same period last year.

Swissco on Monday said it will file for interim judicial management in the next few days after its main lenders rejected its debt-restructuring plan.

It is the third energy-related firm here to take that option in recent months.

Swissco's collapse comes as the industry tackles frighteningly high debt levels amid the most brutal oil-price downturn in 30 years.

Swiber Holdings, with a market cap of $50.2 million, filed for judicial management in July. Technics Oil & Gas, with a market cap of $16.2 million, put in its court order earlier that same month.

In its results filing on Monday, Swissco disclosed it was in negative equity of US$29.1 million as at end-September, with US$291.6 million of liabilities and just US$262.5 million of assets. Current liabilities stood at US$280.3 million, including borrowings of US$255.7 million, as against current assets of US$27.2 million.

Swissco said it decided to adopt a prudent approach to mark its assets to recoverable value by undertaking significant impairments on its fleet of vessels and rigs as these assets have lost much of their value in the current depressed economic situation.

It also made provisions for loans and receivables based on its assessment of their eventual recoverability.

Trading of its shares has been suspended since early last month. The last traded price was 5.2 cents.

A version of this article appeared in the print edition of The Straits Times on November 16, 2016, with the headline 'Swissco reports $418m loss in third quarter'. Print Edition | Subscribe