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PACC Offshore Services posts Q3 net loss of US$5.3m

PACC Offshore Services Holdings (POSH) on Friday posted a net loss of US$5.3 million for the third quarter ended Sept 30, narrowing 8 per cent from its loss of US$5.8 million a year ago.

This comes on the back of the group's share of results from joint ventures, which recorded a loss of US$0.8 million, compared to a profit of US$16 million for 3QFY2017. The high base in 3QFY2017 was due to contribution from the group's POSH Terasea JV, when it executed and completed several major towage and positioning projects.

Revenue went up 52 per cent to US$79.7 million, mainly due to higher contribution from the Offshore Accommodation (OA) segment on improved vessel utilisation.

Loss per share stood at 0.30 Singapore cent, compared to 0.32 cent a year ago.

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In the OA segment in Q3, revenue doubled to US$46.2 million as the group's 750 pax Semi-Submersible Accommodation Vessels - POSH Arcadia and POSH Xanadu - were fully deployed during the quarter. Other OA vessels also reported improved utilisation and charter rates. The segment registered a gross profit of US$14 million compared to a gross loss of US$4.8 million in 3QFY2017.

In its Offshore Supply Vessel (OSV) segment, revenue increased 16 per cent to US$24.4 million as vessel utilisation improved to 75 per cent, with full contribution from the 12 vessels deployed to a Middle East National Oil Company on long-term charters. However, lower day rates and utilisation and higher vessel operating expenses from the remaining vessels in the fleet led to higher gross loss of US$1 million.

As for the Transportation & Installation segment, revenue increased 58 per cent to US$3.9 million on higher vessel utilisation of 67 per cent, which resulted in a gross profit as compared to a loss of US$0.9 million in 3QFY2017.

The only segment to see a decline was Harbour Services & Emergency Response, which saw a 13 per cent decrease in revenue to US$5.3 million, mainly due to fewer salvage and diving jobs completed during the quarter.

In its outlook, POSH said that charter rates for the OA shallow water segment have firmed up over the last few months, and it is expected that this trend will continue in the foreseeable future.

On the other hand, despite more activity, charter rates and utilisation rates for OSVs remained under pressure due to persistent oversupply in this sector. Consequently, the group expects the carrying value of its OSV fleet to be further impaired by year-end, although not to the same extent as in previous years. The impairment amount has yet to be determined, but it is expected to materially impact the results for Q4 2018 and FY2018.

Gerald Seow, CEO of POSH, said: "The group's entry into subsea and offshore renewables in key markets will further diversify our revenue streams and serve as growth platforms for POSH. We also look forward to commencing our charter with Petrobras, which will see the continued deployment of POSH Xanadu in first quarter of 2019."