Ezra records revenue increase but support services division underperformsCompany News // April 14, 2014
Ezra Holdings says its subsea services division has been demonstrating “sustained profitability” since the fourth quarter of FY13 but that the performance of its offshore support services division has been weaker than expected
In a mid-April 2014 announcement about its latest set of results, Ezra Holdings Limited said it had “maintained operational progress,” led by the group’s subsea services division, EMAS AMC. Revenue for the group in the six months that ended 28 February 2014 (the company’s first half of FY14) grew 22 per cent to US$640.3 million compared to the corresponding period in the previous year, and for the three months that ended 28 February 2014 revenue also grew 22 per cent, to US$300.4 million, compared to the corresponding period a year earlier.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) improved to US$79.0 million in from US$69.9 million in corresponding period a year earlier, and adjusted profit after tax in in the first half of FY 14 doubled to US$14.3 million compared to the first half of FY 13.
EMAS AMC continues to be the key driver of revenue growth in the group, posting an increase in revenue of US$118.7 million in the first half of FY 2014 and US$59.3million in the second quarter of the company’s FY 14. This increase in revenue was driven by the increased fleet capacity following delivery of two subsea pipelay construction vessels, Lewek Express and Lewek Centurion, in the fourth quarter of financial year ended 31 August 2013 and the increase in value and number of projects undertaken in the period.
However, the group’s revenue increase was partially offset by a reduction of US$7.0 million for the first half of FY14 and US$6.2 million for the second quarter of FY14 from the group’s offshore support services division, EMAS Marine. Gross profit margin for the division was also weaker.
This was due to an increase in operating costs, which was a result of higher than expected maintenance costs. In addition, the anchor handling tug segment saw weaker utilisation during the quarter. The decrease was partially offset by the revenue contributions from two platform supply vessels delivered after the second quarter of FY13, Lewek Avior and Lewek Alkaid.
Ezra also announced that a new senior management team has been put in place for EMAS Marine. Bennett Neo and Mike Wallace joined the division at the beginning of 2014 as chief executive officer and chief operating officer, respectively. Mr Neo brings with him 20 years of corporate experience with a large portion of it in the oil and gas industry. Mr Wallace has more than 30 years of operational and business development experience in the offshore support industry, spearheading strategic initiatives in companies like Hornbeck Offshore, Tidewater and Trico Marine.