Swiber plunges into the red for Q1 in the absence of one-off disposal gain

SWIBER Holdings, a global provider of engineering, procurement, installation and construction (EPIC) services for the offshore industry, on Thursday reported that it has sunk into the red, with a net loss of US$1.3 million for the first quarter of 2015 compared to a net profit of US$48 million a year ago.

Loss per share for Q1 was 0.2 US cents against an earnings per share of 7.9 US cents a year ago.

The weaker performance was due mainly to the depletion of the group's order book last year, and the absence of a US$95.1 million gain from the disposal of a group of subsidiaries which bolstered earnings a year ago.

Group revenue fell 17.3 per cent to US$164.9 million, compared to US$199.5 million a year ago. Revenue from Latin America, contributed 69 per cent, or US$113.8 million, with the balance coming from East Asia, South Asia, Southeast Asia and other markets.

The share of profit from associates and joint ventures fell 51.5 per cent to US$4.8 million as a result of lower contribution from the Indonesia associates.

"We had a difficult first quarter which was expected given the smaller pipeline of contracts last year. With our pipeline now standing at a record US$1.8 billion, we believe we are well positioned for a strong turnaround especially in the second half," deputy group chief executive officer Darren Yeo said.

"We are working hard at maintaining the momentum of new awards and are cautiously optimistic that we will continue to gain traction in the coming months."

In December 2014, Swiber was awarded a US$710 million EPIC project in West Africa, a new market for the group. Since the beginning of 2015, it has won three contracts for EPIC services in India of more than US$800 million.

Swiber believes the weaker global oil prices will have a smaller impact on shallow water field development and production activities - areas which Swiber's EPIC caters to - compared to the more vulnerable exploration stage of the oil and gas value chain.

"In view of these factors, the group believes its business would be less affected by the industry's expenditure cuts and that it is in a better position to capitalise on future bidding opportunities," Swiber said.