SINGAPORE (Feb 20): PACC Offshore Services Holdings (POSH) continued to be mired in red ink even as 4Q17 net loss narrowed to US$193 million ($254 million) from US$345 million a year ago on lower impairment and loss from joint ventures.
Revenue for the 4Q17 ended Dec rose 71% to $62.7 million mainly due to lower overseas and spot charters for harbour tugs. Gross profit improved by 87% to US$0.8 million.
Sales from the offshore support vessel (OSV) segment revenue increased by 14% to US$19.0 million due to long-term charters to the Middle East and vessels chartered to the Shell Prelude project.
Sales from the offshore accommodation (OA) segment revenue increased by trebled to US$35.9 million as POSH Arcadia, a semi-submersible accommodation vessel (SSAV) continued her charter on the Shell Prelude project.
Sales from transport & installation (T&I) segment decreased by 6% to US$3.3 million as charter rates remained low while sales from harbour services and emergency response (HSER) decreased by 4% to US$4.5 million.
In 4Q17, the group recorded smaller impairment from fixed assets and goodwill of US$108.3 million and US$57.1 million respectively, compared to US$198.9 million and US$111.2 million in 4Q16.
Finance costs increased by 61% or US$2.5 million due to higher loan balance due to financing for the construction of OSV vessels for the long-term charters in the Middle East and higher interest rates in 4Q17.
Group share of results from JVs also posted a smaller loss of US$9.7 million in 4Q17 compared to US$15.5 million in 4Q16. This was mainly due to higher impairment of vessels of US$15.5 million in 4Q17 compared to US$12.5 million in 4Q16 last year, offset by higher contribution from POSH Terasea.
For FY17, net loss came in at US$230.3 million, 38% smaller than US$371.4 million a year ago. The group also generated net operating cash flow of US$20.3 million compared to US$38.2 million.
In its outlook, POSH says although the OSV market is slowly picking up, with oil prices averaging above US$50 per barrel in 2017, offshore oil production activities remain subdued and day rates remain under pressure, mainly due to an oversupply of vessels.
Shares in POSH closed at 38 cents on Tuesday.
