POSH 'making progress on reducing losses'Company News // November 13, 2017
Captain Gerald Seow, Chief Executive Officer of POSH, says a focus on driving vessel utilisation and cost rationalisation strategies have helped the company navigate challenging market conditions.
"We have made good headway in narrowing losses and, importantly, we continue to generate positive operating cashflow. We are proud to have successfully delivered and supported the positioning of the Ichthys CPF and FPSO and Shell Prelude FLNG facility. We look forward to continue supporting the Shell Prelude project and executing the tow of Total’s Egina FPSO in the next quarter.
"The market seems to have bottomed out but the timing and pace of recovery remains uncertain. We will continue to manage our costs prudently and drive vessel utilisation to meet the challenges ahead.”
The company said that oilfield development capital expenditure remains subdued and demand for all categories of offshore vessels remain weak. This will continue to exert significant pressure on charter rates and vessel utilisation and will have a negative impact on the group’s financial performance in the next few quarters.
Under these circumstances, the group will reassess the carrying value of its fleet and goodwill and further impairments are expected. While the amount is yet to be determined, this will have a material adverse impact on the group’s financial results in Q4 FY17 and the 12 months ending 31 December 2017.
As of Q3 FY2017, the group has deployed six vessels to the Middle East for long-term charter contracts with a national oil company and another six vessels will be deployed progressively by Q4 FY2017.
In Q4 FY2017, the company's 750-pax SSAV POSH Arcadia will continue to provide accommodation support for the hook-up and commissioning of the Shell Prelude FLNG facility, the POSH Terasea JV having completed the towage of the Shell Prelude facility in Q3 FY2017. It will be executing the towage of the Egina FPSO in Q4 FY2017.
The Middle East and West Africa remain active key regions where oil majors continue to issue tenders for vessel requirements. The group will continue to focus on and participate actively in tenders in these regions.
Q3 FY2017 revenue was up 27% YoY to US$52.8 million; net loss attributable to shareholders narrows by 25% to US$9.8 million. Generated net operating cashflow of US$10.8 million for Q3 FY2017, and net gearing was at 1.1x times as at end September.