Ezra Holdings optimistic about subsea sectorCompany News // April 13, 2012
Singapore-based Ezra Holdings says it is “on track” to turn its subsea services business around in the financial year ending 31 August 2012 (the company’s FY12).
In addition to expecting its subsea construction fleet to be well utilised, it anticipates that earnings from its subsidiary EMAS AMC will continue to increase in the second half of FY12, in line with its previous projections, as it continues to execute its subsea orderbook, which stands at in excess of US$1 billion.
In a statement issued early in April, Lionel Lee, Ezra Holding’s managing director, said: “Ezra has transformed itself into a leading player in the engineering and project management space with its own assets to execute subsea projects globally.
“Our investment in Aker Marine Contractors back in March 2011 is now paying off. We will continue to focus on leveraging our integrated services to deliver long term value to our shareholders.”
In its interim results for the six months ended 29 February 2012 (1HFY12), group revenue rose 124 per cent, or US$217.5 million, to US$392.3 million, as compared to 1HFY11, largely due to the performance of the company’s subsea services division.
Steady execution and delivery of projects also saw revenue from the subsea services division improve by 41 per cent in 2QFY12 from the preceding quarter, and enabled the division to contribute positively to gross profits.
“This, and the full six-month operation of our marine division’s five platform supply vessels (PSVs) and three anchor handling tug supply (AHTS) vessels helped to lift Ezra’s gross profit by 28 per cent to US$69.0 million in 1HFY12,” Mr Lee explained, noting that the group’s interest cover also strengthened to 4.5 times in 1HFY12 from 3.9 times in the previous half year.
Group net attributable profit (PATMI) jumped 66 per cent to US$35.4 million due to increases in gross profit, other operating income and the share of profit from joint venture companies, despite higher financial and administrative expenses.
Commenting on the higher expenses, Mr Lee explained: “We are building a solid, international infrastructure and an administrative backbone to support our geographical expansion, which will result in greater economies of scale as we expand further.
“Ezra’s continued investment in people, resources and capabilities around the world has placed us in a strong position to ride the next wave of E&P spending, especially in the deepwater segment, and we look forward to reaping the rewards of our globalisation strategy in the years to come.”
In recent weeks the group has successfully placed out 110 million new shares at S$1.10 each, reflecting investor confidence in Ezra’s business and growth prospects. The gross proceeds of S$121 million from this issue will bolster the its balance sheet as it continues to execute its growing order backlog and seize many more opportunities in the offshore oil and gas sector.