Pacific Radiance warns of Swiber impact on NTA, EPS

PACIFIC Radiance has said that while a large sum of doubtful receivables in relation to Swiber's implosion will have an impact on its balance sheet and income statement, its cash flow position will not be affected significantly.

The company detailed this in a filing with the Singapore Exchange on Wednesday after trading closed, as it also sought to distance itself from Swiber's turmoil.

On July 29, Pacific Radiance said that it might not be able to recover about US$10.1 million due to the services rendered to Swiber's subsidiaries.

On Wednesday, Pacific Radiance group finance director Loo Choo Leong said: "The company wishes to clarify that while the provision is expected to negatively impact the net tangible assets and earnings per share of the company for the financial year ending Dec 31, 2016, it is a non-cash accounting provision which is not expected to significantly affect the company's cash flow position.

"Notwithstanding the aforementioned, the company will continue to pursue all legal avenues of recovery of the doubtful receivables."

Mr Loo also stressed that the business models and segment that Pacific Radiance operates in is different from those of Swiber's.

"The group owns and operates a fleet of offshore support vessels which are mostly chartered out on a time charter basis, while Swiber is a contractor which offers a range of engineering, procurement, installation and construction services; the businesses are different," he said.

Pacific Radiance's management stressed that in view of "the challenging environment which may last for the next two to three years", the company continues to manage its operations and financial position in a conservative and sustainable manner.

The group has been rolling out various measures to mitigate risks since the industry began slowing down in 2014.

Part of this strategy includes reducing both capital and operating expenses and managing its cash flows, said Mr Loo.

This includes refinancing of loans with its key lenders, and the amendment of a financial covenant of its sole S$100 million bond issue due August 2018 to avoid any technical breaches.

In parallel, the group continues to intensify its marketing and business development efforts to grow existing markets and expand into new ones.