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Falcon Energy's losses shrink to US$80.9 million in FY2018 on lower expenses, but outlook 'remains challenging'

OFFSHORE and marine company Falcon Energy has reduced its full-year losses on the previous year, on lower expenses.

Its net loss came in at US$80.9 million for the 12 months to June 30, narrowing from US$121.8 million before, according to unaudited results released on Sunday.

The company recorded a lower provision for allowance for impairment of property, plant and equipment, as well as a smaller allowance for doubtful trade receivables.

Revenue fell by 57.4 per cent year on year, to US$45.5 million, with turnover down on a lower volume of works in the oilfield and drilling services division, as well as lower vessel deployment and a decline in charter rates for the marine division.

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Falcon Energy warned that the operating environment for two key businesses will stay challenging in the year ahead. The offshore support vessel (OSV) market faces low rates on intense competition and low margins, it said in its outlook statement, while the market for oilfield services "remains lacklustre" as oil and gas companies cut capital and operating expenditure.

Current liabilities were lower by US$24 million to US$204.5 million, mainly owing to the reclassification of notes payables to non-current liabilities held for sales. The group's current liabilities exceeded its current assets by US$15.8 million in the year.

"Business development activities will be focused on geographical areas and niches in the OSV and oilfield services markets which have shown increased activities," Falcon Energy said, noting that it plans to "exercise strict financial discipline" and increase the operational efficiency and utilisation of its fleet.

Net loss per share was 9.92 US cents, against 15.1 US cents previously, while net asset value stood at 11.46 US cents a share, down from 23.42 US cents before. No dividend was declared.

Falcon Energy closed flat at 3.7 Singapore cents last Friday, before the results.