Ezion Q1 net loss widens sharply to US$211.3m

STRUGGLING offshore and marine player Ezion Holdings has posted the "significant net loss" that it warned about earlier this week, as it swung much deeper into the red for the first quarter.

The scheme of arrangement application for its planned restructuring, which has been delayed since April by the coronavirus pandemic and oil price crash, is also still in limbo.

Still, the management maintained that the group's going-concern assumption is still appropriate, as it cited the support of its lenders and positive operating cash flows that it said are expected to be enough to cover debt obligations for the 12 months ahead.

Losses widened to US$211.3 million for the three months to March 31, from US$12.9 million in the year before, according to unaudited financial statements released on Friday evening.

Revenue fell by 63.3 per cent year on year to US$10.3 million, on the back of both an industry credit crunch and a pandemic-driven slump in vessel utilisation. With cost of sales outpacing the drop in revenue, Ezion was pushed into a gross loss from a gross profit the year before.

But the bottom line was well and truly sunk by a massive impairment loss of US$212.2 million on plant and equipment, trade and other receivables and loan to joint ventures.

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Loss per share was 5.66 US cents, against 0.35 US cent in the year prior, while Ezion's net liabilities stood at 28.9 US cents a share, compared with 23.27 US cents as at Dec 31, 2019.

No dividend was recommended, unchanged from the previous year, as the board cited the group's net liabilities position.

Trading in Ezion shares was voluntarily suspended in March 2019, when the chairman and chief executive asked in a letter for shareholders' prayers.