SINGAPORE (Feb 23): Ezion reported a widening of new 4Q losses to US$66.6 million from US$63.5 million a year ago on the back of a 14.3% fall in revenue to US$72.6 million.
For FY16, Ezion swung to a loss of US$33.6 million on lower sales and higher cost of sales and other operating expenses which include impairment losses.
Revenue fell 9.4% to US$318.2 million due to the absence of contribution from the projects in Queensland, Australia, that did not go into additional trains as originally planned and lower contribution from the group's marine services; delay in the completion of the modifications and upgrade of the group's service rigs due to unexpected technical issues and longer lead time for delivery of certain critical equipment.
Cost of sales and servicing for FY16 increased by 10.3% to US$257.0 million due to the deployment of additional service rigs.
As a result, group gross profit for FY16 decreased by 48.1% to US$61.2 million as compared to FY15.
The other operating expenses in FY16 included impairment losses on plant and equipment and provision for trade receivables amounting to US$70.9 million.
In its outlook, Ezion says it is working closely with its bankers and several government agencies to complete the repair, modification and upgrade of several of its service rigs for deployment as soon as possible. In addition, the group will be focusing on matching its cashflow with the capital expenditure that is required to fulfill its obligation to its customers. The group will also continue to engage in discussions for possible disposal for one of its existing service rigs and to invite potential partners to co-own
some of its asset to further strengthen the group's balance sheet.
Shares of Ezion closed 2 cents higher at 36 cents on Wednesday.
