Eyes on O&M players' Q4 impairment charges

Singapore

THE move by leading offshore support vessel (OSV) owner-operator Swire Pacific Offshore (SPO) to take on significant impairment charges has sparked renewed speculation over whether Singapore-listed offshore and marine players may follow suit and write down the book values of their assets once and for all.

In arriving at the estimated HK$2.31 billion (S$424.6 million) impairment charges on the carrying value of its fleet, SPO cited "a longer period for and a slower rate of recovery" than previously anticipated. Analysts concurred that the protracted downturn should have compelled Singapore-listed O&M counters to do the same but this is caveated on pertinent financial considerations.

Maybank Kim Eng Securities' analyst Yeak Chee Keong told The Business Times that Singapore-listed O&M players have generally withheld from taking on significant write-downs of their fleet valuations a year ago because "they were still hopeful or optimistic that the end of 2016 would bring improved market conditions…