EMAS Offshore maintains profitabilityCompany News // April 8, 2015
EMAS Offshore Limited reported net profit of US$9.7 million in the second quarter of fiscal year 2015, a substantial increase from the US$4.0 million in the corresponding quarter of the previous fiscal year.
Revenue for the quarter was US$60.9 million, compared to US$67.6 million last year.
“The enlarged entity of EMAS Offshore has definitely positioned us to better ride out oil price volatility. While revenues and utilisation rates have declined due to market conditions, we have realised cost benefits and operational efficiencies from the business combination. We are also pleased that the FPSOs, which are largely insulated from the current depressed oil prices, continue to contribute positively,” said Mr Jon Dunstan, EMAS Offshore’s Chief Executive Officer.
For the first half of the fiscal year, reported net profit of US$158.1 million was a substantial increase from the US$14.4 million in the corresponding period, boosted by one-off accounting effects of US$137.5 million from the completion of the business combination of EOC Limited and EMAS Marine. Net profit excluding the one-off accounting effects was also higher at US$20.6 million, a 43 per cent increase, demonstrating the company’s sustained positive operational performance.
The company posted lower revenue of US$133.6 million for the first half, a 9 per cent decrease from US$147.6 million, on the absence of contribution from a leased-in vessel returned in the second quarter of fiscal year 2014, as well as slower activity in the offshore support vessel sector.
In the offshore support and accommodation services division, offshore support vessel overall utilisation rate was 79 per cent for the first half of the fiscal year, largely due to the weakness in the shallow water anchor handling, towing and supply vessels (AHTS) and shallow water platform support vessels (PSV) segments.
However, the company sees ongoing demand for deep water capable AHTS, where utilisation rate remains above 90 per cent.
In the offshore production services division, the two floating production, storage and offloading (FPSO) vessels, Perisai Kamelia and Lewek EMAS, continue to perform well, maintaining high operational uptime of almost 100 per cent.
The company has taken steps to strengthen its balance sheet, and net gearing ratio is improved from 1.28x as at 31 August 2014 to 1.01x.
“Under the current circumstance we are taking a more cautious view for the ensuing quarters. However, we have taken steps to maintain our operational performance, which include exercising and implementing ongoing cost-optimisation initiatives, and focusing on operational excellence. These strategies will serve to protect our bottom line. Moving forward, we will ensure that we continue to improve operational efficiency with an added focus on sustaining vessel utilisation,” said Mr Dunstan.