Ezion Holdings' loss after tax widens to US$46.4m in Q1 from US$12.7m a year ago

LIFTBOAT and offshore assets operator Ezion Holdings' first quarter loss after income tax widened to US$46.41 million from a US$12.74 million loss in the year-ago period.

Revenue fell 45 per cent to US$37.75 million.

Earlier last week, the group has already warned that it expected to post a net loss for Q1 FY2018; it had said that delays in redeployment of some of the group's assets while a refinancing exercise was being finalised had continued to adversely affect revenue and profitability of the group.

In its results statement released late Friday night, the group cited similar reasons for the revenue decline.

Other reasons for the weaker topline included a drop in the utilisation rate of jack-up rigs and not recognising revenue when the group has assessed the customers who are not able to meet existing charter obligations; lower utilisation rates of the group's tugs and barges; and overall reduction in charter rates across the group's fleet of vessels.

As at March 31, 2018, the group's current liabilities of US$1.38 billion (Dec 31, 2017: US$1.24 billion) exceeded its current assets of US$271.26 million (Dec 31, 2017: US$291.46 million).

The group generated US$13.12 million net cash from operating activities in Q1 FY2018, down from US$26.01 million in Q1 FY2017.

Loss per share widened to 2.2 US cents in Q1 FY2018 from 0.7 US cent in Q1 FY2017.

Net asset value per share eased to 12.09 US cents as at March 31, 2018 from 14.7 US cents as at Dec 31, 2017.

The group said that it will continue to focus on its liftboat business and will dispose assets which are facing low utilisation in view of overcapacity in the market. "Jack-up rigs, tugs and barges had been identified within the group's assets to be disposed as the charter rates of these assets are very depressed despite high capital expenditure required to deploy them," it added.

"Even though the utilisation rate of liftboats will improve and the group does not expect charter rates to decline in view of the stabilisation of fossil fuel prices, the group expects to enjoy material improvements in both topline and bottomline towards the end of current financial year. This is because some of the charters are already contracted earlier at lower rates and not all the liftboats will have full-year contributions in the same period.

Ezion added that it believes the financial fundamentals will be strengthened upon the completion of the refinancing exercise and will continue to focus and enhance its liftboats' capability and capacity. "In addition, the group plans to work with strategic investors and partners to grow market share in this business segment in which the group has strong competitive advantage. The group will also explore further growth opportunities in the windfarm business in the Asia-Pacific region to maximise shareholders' values."