EMAS Offshore posts net loss of US$140.5m in Q2

EMAS Offshore Limited posted a net loss after tax of US$140.5 million for the second quarter ended February, from a net profit of S$9.7 million a year ago.

Revenue for the quarter dropped 50 per cent, from US$60.9 million to US$30.5 million. This, said the company, was mainly due to general weakness in the offshore industry. The shallow water platform support vessels and anchor handling, towing and supply vessels segment continues to remain weak.

The group conducted a review of the carrying value of certain vessels in Q2 FY2016 (including those held through joint ventures) and recognised impairment losses on vessels of US$51.4 million and EMAS Offshore's investment in joint ventures (US$38.3 million).

Looking ahead, the group noted that there has been continued significant weakness and volatility in the oil price environment. The volatility and weakness are expected to continue and this will reduce all activities in the exploration, development and production of oil and natural gas. Coupled with a general oversupply environment of offshore supply vessels, the group is likely to experience lower charter rates and/or decreased vessel utilisation in the foreseeable future, it said.

This will have a negative impact on the group's financial performance. The group has undertaken significant impairment on its assets in the current quarter and will continue to monitor the market condition to assess requirement for further impairment if required.