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Ezion posts Q3 net profit fall as oil majors tighten belt; to explore M&As
EZION Holdings reported on Thursday that its net profit for the third quarter ended Sept 30, 2015, fell 38.4 per cent to US$30.3 million.
Revenue slipped 9.1 per cent to US$86.2 million. Gross profit was 48.4 per cent lower than a year ago around US$25 million.
"The decrease in revenue was mainly due to the absence of contribution from the marine and offshore logistic support services division as the projects in Queensland, Australia did not go into additional trains as originally planned,'' Ezion explained.
The offshore marine company's bottomline was also hit by the cost of sales and servicing which rose 31.8 per cent, or US$14.8 million, to US$61.3 million due to the deployment of additional multi-purpose service rigs.
Looking ahead, Ezion expects oil majors to continue to cut spending on exploration and development given the weak oil prices.
"While the focus will be on extraction and production related activities, the lower fuel prices have prompted tightening of related operating expenditure and the increase in demand for higher standard of equipment and services from clients,'' it said.
Ezion said it will try and meet these requirements through switching the units among its clients and through strategic modifications and upgrades.
It will also explore merger and acquisitions and strategic tie-ups to enhance returns from its existing assets.