Ezra profit jumps over 7 times on one-off gain

EZRA Holdings' Q1 FY15 net profit for the three months ended Nov 30, 2014, jumped 7.57 times to US$54.4 million, due to a US$106.3 million one-off gain from the acquisition of subsidiaries and a foreign exchange gain of US$9.4 million, versus a foreign exchange loss of US$2.7 million in Q1 FY14.

The increase was partially offset by the US$42.3 million one-off loss on step up of associated and joint venture companies to subsidiaries and a one-off impairment of fixed assets of US$10 million.

Revenue over the same period fell 6 per cent to US$321 million, as contributions from its subsea services division fell US$22.1 million and revenue from its offshore support and production services division slumped US$18.7 million. The decrease was partially offset by a US$22 million gain from its marine services division.

Ezra acknowledged on Friday the global concerns on the prospects of oil & gas and oilfield services operators in the current low oil price environment.

"Any prolonged and continued decline in the oil price could result in oil companies severely cutting back on exploration budgets and moderating development capital expenditures to maintain greater cash flow discipline. This could lead to a slowdown in new project awards," it said.

For now, Ezra will focus on profitably executing its current backlog of US$2.5 billion, which includes US$511 million from two floating production storage and offloading units that its operating subsidiary, Emas Offshore Limited, has stakes in.

It will also increase cost discipline and focus more on non-core asset rationalisation, cost flow generation, capital management and the deleveraging of its balance sheet.

For the three months ended Nov 30, 2014, Ezra's earnings per share stood at 5.58 cents while net asset value per share was 139.39 cents. No dividends were declared for the quarter.

Before market opening on Friday, Ezra's counter stood at S$0.575, a 7.48 per cent jump from Wednesday's close.