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    Swiber CEO describes difficult first quarter - hopes for turnaround later this year

    Company News // July 22, 2015

    Swiber Holdings Limited has reported a slump in its earnings for the three months ended 31 March 2015 (first quarter 2015) as the group "clears the decks" for a pick-up in business in the coming months.

    Net profit for the group stood at US$70,000 against US$52.8 million. Net attributable loss to shareholders amounted to US$1.3 million compared to a profit of US$48.0 million in the same period last year. The declines were due mainly the depletion of the group’s orderbook last year, and the absence of a US$95.1 million gain from the disposal of a group of subsidiaries which bolstered the previous comparable numbers.

    Reflecting last year’s slimmer pipeline, revenue fell 17.3 per cent to US$164.9 million compared to US$199.5 million in the first quarter of FY14. During the quarter under review, 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 group’s gross profit margin improved to 11.8 per cent in the first quarter of FY15 from 4.5 per cent in the previous corresponding period after more stringent controls were imposed over operating costs.

    Deputy Group Chief Executive Officer Darren Yeo said: “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.

    “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.”

    Mr Yeo added that Swiber’s EPIC business caters mainly to the field development rather than exploration stage of the production cycle in the oil and gas industry, which is more vulnerable to changes in oil prices. Its projects are also in shallow water, which have lower break-even costs.

    “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.

     

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