Singapore’s Ezra Holdings, an offshore oilfield services provider the oil and gas industry on Thursday posted net loss for the three months period ended 30 November 2015 (“1QFY16”). According to the company, this is Ezra’s first loss since listing.
For the quarter, the group reported revenue of $152.3 million and net loss of $53.7 million. The Group’s Marine Services division, predominately TRIYARDS, reported an increase of $45.4 million in revenue for 1QFY16 compared to a year ago. The increase was mainly due to higher contribution from the Triyards Group as there were more self-elevating units and vessels under construction as compared to the previous corresponding period, as well as higher contribution from engineering design work.
Offshore support division fails to deliver
The Group’s Offshore Support and Production Services division, predominately EMAS Offshore Limited, saw a decline in revenue of $19.3 million. The decrease in revenue was mainly due to general weakness in the offshore industry in addition to seasonal fluctuation as a result of monsoon in Asia. The shallow water platform support vessels (“PSV”) segment continues to remain weak, Ezra said.
Due to softness within the offshore support vessel segments, gross profit margin for the Group fell from 22% in 1QFY15 to 10% in 1QFY16 and gross profit for the period declined to $15.7 million. Loss after tax came in at $53.7 million which included a realised hedging loss of $13.9 million.
Lionel Lee, Ezra’s Group CEO and Managing Director, said: “The global oil & gas industry continues to be challenging for the offshore marine and subsea companies. The volatility of the oil price and the depressed state of the oil and gas industry has led to reduced activity and uncertainty in new contract awards. Like other oil and gas support services companies, we are currently working in opposition to industry tide and against difficult market conditions during this downcycle.”
Lower charter rates ahead
He said that 2016 will be a tough year for the Group: “As we strive to work amidst the extremely challenging operating conditions, the Group will focus on improving vessel utilisation and project execution as well as winning contracts. The Group continues to work on the rationalisation of its non-core assets with the goal of deleveraging its balance sheet.”
Going into 2016, Ezra expects its Offshore Support and Production Services Division to experience lower charter rates and decreased vessel utilisation which will weigh on the Group’s financial performance.
“As the Marine Services Division diversifies its products and services, the Group believes that there will be continued demand for its offerings, notwithstanding the competitive and challenging environment,” Ezra said.