Emas Offshore reports a loss - seeking new working capitalCompany News // July 15, 2016
EMAS Offshore Limited has reported a net loss of US$23.2 million for the financial period ended 31 May 2016 against what it described as "challenging macroeconomic and industry conditions."
For the three months ended 31 May 2016 the group recorded a revenue of US$35.1 million compared to revenue of US$59.2 million in the year-ago period. This decline in revenue was the result of ongoing weakness in the offshore industry leading to markedly lower demand as well as general over-supply in the offshore support vessels (OSV) segment.
As a result, though cushioned by lower cost of sales, gross loss for the quarter was US$12.4 million as compared to gross profit of US$6.0 million in the previous corresponding period.
Emas Offshore said the West African market continues to be promising with increased bidding activities. The group is looking to further develop its business in the West Africa region as well as other regions so as to diversify revenue sources from its established base of Southeast Asia.
Captain Adarash Kumar, EMAS Offshore’s Chief Executive Officer, said: “The recent general increase in oil price has calmed sentiments somewhat and we have started to observe a marginal uptick in enquiries for our vessels. That said, as recovery is not expected to be imminent, we remain keenly aware of the softness in this market and will continue to stay vigilant on costs while working to improve efficiency and utilisation. Apart from our latest announced contract wins in Southeast Asia and West Africa, the Group is working on harnessing synergies and tapping into activities of the wider Ezra family to enter into new markets.”
On 1 July 2016, the group formalised the sale of its entire 41.7 per cent equity share in PV Keez Ltd, which owns FPSO Lewek EMAS, through a sale and purchase agreement. The sale is consistent with EMAS Offshore's strategy of moving away from the ownership of FPSO assets and to leverage on the Group’s experience in FPSO conversion to provide value-added services to third parties instead.
The group said it is in discussions with various parties on its financial obligations, which includes securing new working capital facilities. This is expected to be finalised by the end of the current financial year.