Net profit for the Group’s first quarter of 2015 stood at $70,000 against $52.8 million in 1Q 2014.
According to Swiber, the declines were mainly due to the depletion of the Group’s order book last year, and the absence of a $95.1 million gain from the disposal of a group of subsidiaries which bolstered the previous comparable numbers.
“We had a difficult first quarter which was expected given the smaller pipeline of contracts last year.”
Group revenue fell 17.3% to $164.9 million compared to $199.5 million in 1Q 2014.
According to its first quarter results report, the Group’s cost optimisation programme is showing results as administrative expenses fell 44.7% to $8.1 million and other operating expenses declined nearly 95% to $1.7 million from $31.3 million.
Deputy Group Chief Executive Officer, Darren Yeo, said: “We had a difficult first quarter which was expected given the smaller pipeline of contracts last year. With our pipeline now standing at a record $1.8 billion, we believe we are well positioned for a strong turnaround especially in the second half.
“We are working hard at maintaining the momentum of new awards and are cautiously optimistic that we will continue to gain traction in the coming months.”
Yeo added that Swiber’s EPIC business caters mainly to the field development rather than exploration stage of the production cycle in the oil and gas industry, which is more vulnerable to changes in oil prices. Its projects are also in shallow water, which have lower break-even costs.
“In view of these factors, the Group believes its business would be less affected by the industry’s expenditure cuts and that it is in a better position to capitalise on future bidding opportunities,” Swiber said.
Swiber focuses on shallow water and field development stage rather than exploration part of the oil and gas value chain. In order to mitigate market pressures, Swiber says it will leverage on asset-based strategy to maximise vessel usage, negotiate with suppliers to greater advantage, and cut costs.