Ezion sinks into the red for Q1

EZION Holdings on Friday reported that it has sunk into the red with a US$12.74 million net loss, compared to a net profit of US$15.49 million a year ago.

Revenue slipped 16.4 per cent to US$68.59 million, compared to US$82.09 million a year ago due to weaker charter rates, a drop in the utilisation rate of its service rigs and offshore support vessels.

The offshore group saw a decrease in other income in the first quarter ended March 31, 2017 due to the absence of the gain on the disposal of asset held for sale seen a year ago.

Its other operating expenses in Q1 2017 includes unrealised foreign exchange losses of about US$13.3 million mainly due to the strengthening of the Singapore Dollar against the US dollar on March 31, 2017. This resulted in foreign exchange losses on the group's notes payable.

Ezion had warned on Monday that the depreciation of the US dollar in the first quarter ended March 31 had led to a "material foreign exchange loss" on the group's unsecured financial liabilities denominated in Singapore dollars, causing the group to make a net loss for Q1.

Looking ahead, Ezion said its operating environment remained very challenging.

"The fossil fuel prices have again shown weaknesses in the recent weeks. In addition, despite clients' new requirement for the group's asset and services, the rates remain depressed."

Plan to sell certain assets was tough due to challenges faced by potential buyers in securing debt financing. However, it is working with potential partners on co-ownership of some of its assets to better deploy the assets and to strengthen the group's balance sheet.