SINGAPORE (Feb 21): Offshore support vessel operator PACC Offshore Services Holdings (POSH) reported 4Q16 net loss more than doubled to US$345.4 million ($491 million) from US$149.7 million in 4Q15.
The latest quarterly results were primarily impacted by impairments of US$111.2 million and US$198.9 million, to goodwill and vessels respectively in 4Q16.
Revenue for 4Q declined 49% to US$36.7 million, amid what POSH describes as “continued challenging conditions across the industry”.
This was mainly due to lower utilisation and charter rates across its major business segments which all saw declines in revenue, particularly its offshore supply vessels (OSV) division where revenue fell 51% to US$16.7 million.
Share of joint ventures’ results for the quarter saw a loss of US$15.5 million, primarily on lower contribution and impairments made on joint venture vessels.
POSH’s 4Q16 loss brings the group’s FY16 net loss to US$371.4 million, after providing for US$310.1 million on non-cash impairments.
However, the group managed to generate a positive net operating cash flow of US$38.2 million for FY16.
In its filing after the market closed on Tuesday, POSH says the outlook for the oil and gas (O&G) sector continues to remain depressed as “supply and demand balances are still slow to return to equilibrium” despite OPEC’s agreement to cut oil production in Nov 2016.
Nonetheless, the group says it will continue to focus on managing costs and maximising the utilisation of its fleet, highlighting that two of its 12 vessels contracted with an oil major in the Middle East have commenced charter, with the remaining ten vessels to be deployed progressively in 2017.
“We will maximise utilisation of our vessels as long as it generates positive EBITDA. We will be prudent in our cash management and continue driving cost rationalisation and operational excellence to position ourselves for the longer-term recovery,” comments Gerald Seow, CEO of POSH.
Shares of POSH closed 4% lower at 36 cents on Tuesday.
