You are here

Ezion sinks US$13.7m into the red for Q3, warns of future impairment losses

ezion liftboats 16288983 .jpg
The group, which has further deployed four liftboats after it last reported second-quarter results, said that it will be focusing on liftboats following a strategic review of its business.

EZION Holdings fell into the red for the third quarter, and warned that it is in the process of assessing the amount of impairment losses on its assets.

The offshore and marine group recorded a net loss of US$13.7 million for the third quarter, compared with a net profit of US$9.4 million in the previous year, it said in a Singapore Exchange filing on Thursday morning.

For the three months ended Sept 30, revenue fell 20.2 per cent to US$79.8 million from the year-ago period. The decline in revenue was due mainly to a reduction in charter rates and a drop in utilisation rate of its service rigs and offshore support vessels, it said.

It made a loss per share of 0.75 US cent, compared with earnings per share of 0.39 US cent in the previous year.

sentifi.com

Market voices on:

Ezion said that the group is exploring various options to reduce the burn rates of service rigs and offshore logistics vessels that are not deployed. While it continues to seek deployment opportunities, it will also be looking to dispose of these rigs and vessels.

For long overdue and disputed receivables, it may terminate the contract and seek to take repossession of those assets if there are opportunities to sell them or redeploy them elsewhere, it added.

"In view of the above, the group is in the process of assessing the amount of impairment losses on its assets, such as vessels and trade receivables," it said in its results.

"The assessment of the amount of impairment losses on the group's assets is a highly judgemental and complex exercise which is heavily dependent on the market circumstances."

Ezion expects to finalise the assessment on the impairment loss before the release of its fourth-quarter results.

The group, which has further deployed four liftboats after it last reported second-quarter results, said that it will be focusing on liftboats following a strategic review of its business.

"In the past few months, the group has received enquiries for more units of its liftboats which indicates strong demand for liftboats services going forward," it said.

It has five more liftboats which it will try to deploy in the next 12 months - which it can do so successfully only if it has the appropriate capital and debt structure, as well as cash flow.

Ezion said that it is now in "advanced stages of negotiation" with secured lenders to refinance its existing liabilities and to release additional working capital to deploy these remaining liftboats.

Powered by GET.comGetCom