EOC Limited (EOC or the Group), an associate company of Singapore-based Ezra Holdings Limited and one of Asia's leading providers of offshore production services to the oil and gas (O&G) sector, has started its latest financial year on a firm foundation with a fourfold jump in net attributable profit to $3.0 million for the first quarter ended Nov. 30, 2013 (1Q FY14).
During the quarter, the Group's revenue also increased by 5 percent to $11.1 million. Most of EOC's revenue is now derived from recurrent income from the long-term charters of its construction fleet. However, a growing portion of its sales is expected to come from fee-based project management as well as engineering, procurement and construction services to the offshore production sector, in line with its renewed strategic focus.
EOC's Acting Chief Executive Officer, Jon Dunstan, said: "This set of results is the fruit of our concerted efforts to improve the Group's profitability and strengthen its balance sheet. We are determined to grow both our recurrent as well as our services fee income base."
The Group is also in a stronger financial position today - its interest cover improved to 4.6 times in 1Q FY14 from 2.7 previously, and net gearing has dipped below 1. Cashflow from operating activities, backed by recurrent income from bareboat charters, held above $2 million for the quarter.
"Now that we have established a firmer foundation, we have greater flexibility to tap opportunities in high growth E&P (exploration and production) markets in the region, where demand remains robust," added Dunstan.
The Group also jointly owns two floating production, storage and offloading (FPSO) vessels, Perisai Kamelia and the Lewek EMAS, which added $1.4 million to earnings in 1Q FY14. Last November, EOC's 49 percent-owned Perisai Kamelia commenced its charter contract with Hess Exploration and Production Malaysia B.V. Under the three-year charter contract secured via EOC's local Malaysian partner, Larizz Petroleum Services Sdn Bhd, the FPSO is deployed to support a gas production project in Malaysia's North Malay Basin. Signed in 2012, the contract is valued at about $272.1 million, with extension options that could add another three years to the charter duration.
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