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Low oil prices hit Kim Heng's Q1 revenue, earnings
Kim Heng Offshore & Marine on Wednesday reported a 72 per cent drop in profit to S$1.1 million for its first quarter ended March 31, 2015.
Revenue fell 31 per cent to S$16.3 million, due to lower revenue from the offshore rig services and supply chain management segment.
The decrease in this segment was in turn due to drop in marine offshore support services income, chartering and towage income, equipment rental income, and sale of materials.
"These decreases were mainly due to continued low demand for maintenance of rigs and related goods and services from our customers as oil prices remain low."
"As oil prices remain low, downward pressure on offshore exploration activities has not alleviated and the demand for maintenance of rigs and related goods and services has not picked up. Given the current conditions in our operating environment, we expect our business to remain volatile and challenging in the next 12 months," it said.
"Moving forward, the group will continue to assess potential merger and acquisition opportunities. The group's current strong cash position allows us to undertake expansion activities and additional projects, which will put the group in good stead to capitalise on the attractive valuations expected within the energy sector," it added.