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CH Offshore Q3 net loss widens as brokers' commission raises costs
MAINBOARD-LISTED vessel chartering company CH Offshore fell further into the red in the third quarter, on the back of a provision for brokers' commission that drove up administrative expenses, according to results released on Wednesday.
Net loss attributable to shareholders widened to US$6.29 million in the three months to Sept 30, from US$1.38 million in the year before.
The brokers' commission came after arbitration proceedings that were brought by three ship brokers against CH Offshore, the company noted in its financial statements. As such, administrative expenses surged from US$999,000 to US$5.79 million.
The latest sea of red came even as revenue more than doubled from US$2.77 million to US$5.84 million amid a higher utilisation rate, the chartering-in of a third-party vessel, and contributions from two vessels taken over from an associate in 2018.
For the nine months, CH Offshore - a subsidiary of oilfield services provider Baker Technology - posted a net loss of US$13.1 million, against US$23.8 million previously, including losses attributable to impairment provisions for its vessels, an investment in an associate, and a doubtful debt provision.
Meanwhile, revenue jumped to US$14.5 million, up from US$6.54 million before.
The company noted in its outlook statement that oil prices are expected to remain volatile, while near-term charter rates "are also expected to remain soft, owing to the over-capacity and uncertainties in demand for new builds".
It said that it would focus on operational efficiency, cost reduction and cash preservation.
No dividend was recommended, unchanged from the year-ago period, which the board said is "in view of the group's operational and financial cash needs".
CH Offshore shed 0.3 Singapore cent or 5.88 per cent to 4.8 Singapore cents on Wednesday before the results were released.