POSH reports third quarter resultsCompany News // November 4, 2015
Offshore marine services provider PACC Offshore Services Holdings Ltd (POSH) has announced results for the period ending 30 September 2015.
For the three months ended 30 September 2015 (Q3 FY15), the group reported a year-on-year (YoY) revenue increase of 20 per cent to US$80.4 million on the back of strong growth in the offshore accommodation division. The division recorded contribution from its 750-pax POSH Xanadu semi-submersible accommodation vessel and from the commencement of charters of three 238-pax light construction vessels POSH Endurance, POSH Enterprise and POSH Endeavour.
Gross profit grew 6 per cent YoY to US$18.4 million in the quarter, and share of joint ventures’ results swung from a loss of US$5.7 million in the previous corresponding period to a gain of US$873,000 in Q3 FY15. This was mainly due to a higher contribution from its specialist offshore marine service contractor joint venture, POSH Terasea
The group's net profit attributable to shareholders in Q3 FY15 was US$12.6 million, down from US$14.6 million in the previous year. The lower earnings was due to a smaller US$0.8 million one-off gain from the sale of vessels during the period, compared to a US$11.6 million exceptional gain in Q3 FY14.
For the nine months ended 30 September 2015 (9M FY15), revenue grew by 17 per cent over the corresponding period to US$209.0 million on higher contribution from the offshore accommodation segment. Gross profit fell 20 per cent to US$40.8 million on lower charter rates and utilisation for POSH’s OSV and transport and installation
divisions as well as higher operating costs. NPAT for 9M FY15 was US$18.7 million, down from US$63.2 million a year ago, in part because the group booked a US$2.6 million gain from the sale of vessels compared to US$46.5 million a year ago.
The group generated net operating cash flow of US$30.7 million for the nine-month period. It remains in a strong financial position, with a net gearing of 0.46 times and untapped bank lines of approximately US$374.5 million at the end of September 2015.
OSV revenue declined 12 per cent YoY to US$38.0 million (Q3 FY14: US$43.0 million) in the face of lower charter rates and vessel utilisation. Gross profit decreased by 49 per cent to US$5.3 million on the lower income recorded.
The offshore accommodation division recorded a nearly two-fold increase in revenue to US$26.9 million (Q3
FY14: US$9.0 million) on the back of contribution from POSH Xanadu and the three LCVs. Accordingly, gross profit improved more than two times to US$10.9 million.
"With the current weak oil prices, oil companies are reducing or deferring their capital expenditure, reviewing existing charter arrangements and renegotiating charter rates. The group is facing similar demands from charterers and expects continued pressure on charter rates and vessel utilisation in the next few quarters," said POSH. "These factors will have a negative impact on the financial performance of the group until market conditions improve. In the near term, the group continues to concentrate efforts in establishing market share in key markets such as the Middle East and Africa and improve utilisation by exploring more charter opportunities in frontier markets. The group is also taking active steps to re-set its cost base in order to remain cost competitive."
Mr Gerald Seow, Chief Executive Officer of POSH, said: “Our steady performance this quarter despite continued volatility in oil prices reflects the soundness of our diversified and differentiated strategy. Notwithstanding the challenges that we face in this sector, we have been able to secure major contracts with national oil companies and major contractors due to our service quality. We will continue to build on these relationships.”