Ezion goes into the red with Q1 loss of US$12.7 million

Singapore

OFFSHORE and marine group Ezion Holdings slipped into the red for the first quarter, with a US$12.74 million loss after income tax on lower revenue and the absence of one-time asset disposal gain.

This was a reversal from a profit after tax of US$15.49 million for the year-ago period.

Loss per share for the quarter ended March 31, 2017, was 0.70 US cent, compared to earnings per share of 0.84 US cent.

First quarter revenue fell 16.4 per cent to US$68.59 million on reduced charter rates, lower utilisation of the group's service rig fleet and further depression in utilisation of its offshore support vessel fleet.

Other income was drastically lower at US$215,000 compared with US$13.86 million, in absence of a one-time asset disposal gain of US$13.15 million registered for the year-ago period.

Share of results of associates and jointly controlled entities, net of tax, more than halved to US$3.63 million from US$8.22 million for the first quarter of FY16.

Cash and cash equivalents stood at US$186.97 million as at March 31, 2017, compared with US$206.34 million one year ago. This decrease was mainly due to the deployment of funds towards the refurbishment and modification of the group's service rigs.

Ezion said that the operating environment in the marine and offshore oil and gas industry remains very challenging.

The group said that it is working hard to improve its fleet utilisation in the second half of FY17, even as it does not expect charter rates of its service rigs and offshore support vessels to recover quickly.

This may call for modification and upgrading of its service rig fleet, and the group endeavours to match the capital expenditure involved to its cash flow.

It also said that it is working with potential partners on co-ownership of some of its assets.

In late March, Ezion announced a series of agreements to wrest over the full control of two 50:50 joint ventures with Scott and English (S&E), a unit of Swissco Holdings, a listed company now undergoing judicial management.

Shortly after, Ezion said that it had entered into a heads of agreement with Sea Explorer Ltd for the sale of 50 per cent effective interest in three indirect wholly owned subsidiaries. The transaction, pegged at a total sales consideration of US$70 million, called for Ezion to part with interests in Teras Cargos Logistics and two units tied to the JVs with S&E - Strategic Offshore and Strategic Excellence.

Shares in Ezion closed flat at S$0.31 on Friday.