Pacific Radiance hit by impairmentsCompany News // February 27, 2017
Singapore-based Pacific Radiance says it anticipates that the challenging market conditions that affected its financial performance for the full year ended 31 December 2016 will continue for the next 12 months.
In FY16, group revenue came to US$69.4 million, 43 per cent lower than FY15's US$121.8 million, due mainly to lower vessel utilisation and charter rates in its key business segment.
As a result of the difficult operating environment, the group reported a net loss of US$121.7 million which included total impairment charges of US$52.2 million.
Pacific Radiance had made impairment charges of US$28.7 million for its directly-owned fleet and there were no further vessel impairments in the second half. The remaining US$23.5 million charges for FY16 are due to provisions for doubtful receivables.
Pang Yoke Min (冯学民), Executive Chairman of Pacific Radiance, said: “We anticipate a slow recovery in the market with the widely expected balance in the oil supply and demand gap by the second half of 2017. Until then, the group will continue to weather the headwinds by maintaining an efficient cost structure without hampering our operations, and strengthen our presence in key markets.”
In FY16, the group continued its cost rationalisation exercise which helped to reduce its general and administrative expenses by 12 per cent to US$21.0 million even with the commencement of its ship repair yard in August 2016.
Mr Pang said: "We remain focused on the long road ahead, and the strategic initiatives we have implemented to build a sustainable business since 2014 have fortified the group's position to ride through this downturn with the support of our financial and business partners. The group is currently working closely with its key lenders to enhance its liquidity position.”