Ezra's Profit After Tax Falls 79% YOY to $4.7M in 2Q 2015

Singapore-listed Ezra Holdings Ltd., a contractor and provider of integrated offshore solutions to the oil and gas industry, posted $4.7 million in profit after tax (PAT) for the second quarter of financial year 2015 (2Q 2015) that ended Feb. 28, down 79 percent from last year's $22.1 million amid a volatile industry environment, the firm said in its quarterly results released Wednesday.

Revenue however rose a marginal 1 percent to $302 million from $300.4 million, due primarily to an $11.6 million contribution from its Marine Services Division, which was partially offset by a decrease in revenue of $4.7 from the Subsea Services Division and $5.4 million from Offshore Support and Production Services Division.

Revenue from EMAS AMC -- Ezra’s Subsea Services division -- declined by $6.7 million in 2Q 2015 due to market conditions. But EMAS AMC’s flagship subsea construction vessel Lewek Constellation is expected to contribute to Ezra's revenue from 3Q 2015 on commencement of its inaugural pipelay project in the Gulf of Mexico for Noble Energy soon. Lewek Constellation has secured several projects amounting to almost $500 million, which will be executed over the next 18 months.

Lower 2Q 2015 revenue from the Subsea Services Division was attributed mainly to projects under execution being in the earlier phases of execution, which resulted in lower percentage of completion recognition compared to a year ago.

Meanwhile, EMAS Offshore -- Ezra's Offshore Support and Production Services division -- was also affected by a decline in revenue due to the absence of contribution from a leased-in vessel as well as weakness in the shallow water offshore support vessel segment. The unit's earnings were cushioned by contribution from its floating production storage and offloading (FPSO) facilities, which maintained almost 100 percent uptime in the quarter.

The increase in its marine services arm TRIYARDS' revenue for 2Q 2015 was due to a new source of income contribution from Strategic Marine entities that was acquired in 1Q 2015.

“The O&G industry continues to face ongoing headwinds ... We are maintaining our cost discipline with greater focus on cost-base rationalization and optimization to improve margins and shareholder value. We also seek to rationalize non-core assets to accelerate the deleveraging of and strengthening the Group’s balance sheet. While the current environment is challenging and will cause volatility in our results, we are cautiously optimistic that the long-term fundamentals of the oil and gas industry will remain encouraging,” Lionel Lee, Ezra’s Group CEO and managing director, said in the press release.


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