Swiber reports small net loss for first quarterCompany News // May 16, 2016
Swiber Holdings Limited has reported a net loss of US$0.2 million for the first quarter ended 31 March 2016 (1QFY16). The negative bottom line resulted mainly from higher income tax expense of US$8.7 million against US$2.2 million previously.
The top line view was more sanguine. Group revenue rose 16.0% to US$191.3 million compared to US$164.9 million in 1QFY15 due mainly to new contracts secured in the last 12 months despite depressed market conditions. In particular, revenue from ongoing projects in South Asia contributed 92.2 per cent or US$176.4 million, with the balance coming from Latin America.
Group pre-tax profit more than tripled to US$8.5 million in 1QFY16 from US$2.3 million in the same quarter last year. Gross profit margin improved to 15.5 per cent in 1QFY16 from 11.8 per cent in the previous corresponding period, helped by stringent control on operating costs and lower procurement and subcontract costs.
Other operating income dropped 52.7 per cent to US$1.4 million in 1QFY16 from US$2.9 million previously, reflecting the absence of fair value gain on a financial derivative of bank borrowings of US$0.7 million and gain on disposal of property, plant and equipment of US$0.5 million The share of profit from associates and joint ventures fell 41.5 per cent to US$2.8 million following lower contributions from certain joint ventures and associates.
Group administrative expenses declined 12.4 per cent to US$7.1 million due to the company's cost optimisation programme. A net foreign exchange loss of US$2.8 million caused other operating expense to rise 46.7 per cent% to US$4.3 million from US$2.9 million. Finance costs were maintained at US$13.9 million. These include interest on bank borrowings and finance charges/debt issuance cost on debt securities.
Deputy Group Chief Executive Officer and Group President Mr Darren Yeo said: “Our first quarter results reflected our efforts in securing new contracts, especially in South Asia, despite difficult market conditions. We continued to focus on maximising cost efficiencies amid the tough operating environment. While business sentiment in the oil and gas industry remains depressed, the group believes that the impact on shallow water field development and production activities, where Swiber is an established provider, will be lower.”
Mr Yeo added that Swiber’s focus on field development rather than exploration stage of the production cycle in the oil and gas industry makes it less vulnerable to changes in oil prices and the industry’s expenditure cuts. The Group has also instituted a more stringent cost control programme.
“We continue to make headway in our turnaround effort by improving our operational performance while maximising cost efficiencies. This puts us in a better position to capitalise on future bidding opportunities,” Mr Yeo said.