Swissco's Q3 net profit surges 78.8% to S$10.4m on OSV charters, acquisition
Singapore
MAINBOARD-LISTED Swissco Holdings (Swissco) on Wednesday announced a 78.8 per cent rise in its third-quarter net profit to S$10.4 million from S$5.8 million in the same period last year, with higher contributions from its offshore support vessel (OSV) chartering business and boosted by its acquisition of Scott and English Energy.
Revenue for the three months ended Sept 30 was S$35.9 million. For the nine months ended Sept 30 (9M), net profit reached S$20.1 million, 43.3 per cent higher than the S$14 million made in the same period last year.
The acquisition of Scott and English Energy, which was completed on July 30, has been accounted for as a reverse acquisition. Hence, the consolidated financial statements for the three-month and nine-month periods ended Sept 30 have been prepared as a continuation of Scott and English Energy's financial statement.
Essentially, the results of the enlarged group for Q3 and 9M consist of the results of Scott and English Energy and the results of Swissco Group from Aug 1 to Sept 30, 2014.
Earnings per share - 1.739 Singapore cents and 4.006 Singapore cents in Q3 and 9M respectively - has been restated and reflects the results of Scott and English Energy until the date of the acquisition, and the results of the enlarged group from the acquisition date onwards. It has also been retrospectively adjusted to take into account the share consolidation of every two shares in the capital of the company into one.
"The group has benefited from the acquisition of the rig business of Scott and English Energy, which greatly boosted our financial performance," said Swissco's executive chairman Tan Fuh Gih.
"The successful synergies achieved in the acquisition ensure that we can continue to capture opportunities in the offshore oil-and- gas industry as we penetrate the upstream market and across different geographical regions. The rig business complements our vessel business, and also ensures visibility of income and enhances shareholder value, as is evident from the results."
Revenue from the chartering of the group's OSVs was S$9 million whereas the maritime services segment registered revenue of S$26.4 million with the delivery of two vessels. Compared to last year, OSV chartering continues to register higher revenue as a result of more vessels owned and operated. The fleet also comprised higher-value vessels that earned higher rates and margins. Total revenue amounted to S$35.9 million for Q3 and 9M.
On the outlook for the group, Mr Tan clarified that although analysts and industry watchers have cautioned that the sector faces certain challenges such as oversupply of rigs - which may impact day rates should oil prices continue to fall and major oil producers choose to cut back on spending - this may have greater impact on the deepwater segment as it is more costly.
"Swissco's drilling and service assets are for shallow waters and the majority of them have firm long-term contracts with National Oil Company as our end client. So we would be less affected by the volatile environment."
