EMAS Bags $24M Charters for OSVs, Post $5.2M Net Profit for 3Q FY2015

EMAS Offshore Limited, an offshore services provider to the oil and gas industry, reported Monday that it has clinched three new charters, valued at more than $24 million including options, for work with oil majors in West Africa and Thailand.

The firm secured two contracts from EMAS Energy, a unit of Ezra Holdings Ltd.'s Well Services division. The first contract is the provision of a Platform Support Vessel to an oil major in Thailand, while the other contract is for the supply of an Anchor Handling Tug Supply (AHTS) vessel for a national oil company, with both deals awarded after a competitive tendering process. Under the $12 million contracts, EMAS Offshore will provide accommodation, towing, anchor handling and logistics support for oil and gas production platforms.

Over in West Africa, EMAS Offshore’s AHTS vessel will provide sea transportation services, including towing, performing anchor handling and positioning of rigs and other floating structures for an oil major.

“We have a distinct advantage of being able to deploy vessels globally. I am delighted to see that our strategy of focusing our efforts in West Africa where offshore activities remain healthy is paying off. Additionally, the wins in Thailand demonstrate the synergy we have within the EMAS brand to deliver integrated solutions, and is yet another competitive advantage we can leverage, especially amidst market volatility,” Jon Dunstan, EMAS Offshore’s CEO, said in the press release.

EMAS Offshore indicated that the average duration of the contracts is approximately 1.1 years, with the charters expected to commence in the fourth quarter of financial year 2015 beginning June 1.

Meanwhile, the company posted a net profit of $5.2 million in the quarter ended May 31 (3Q FY15), up from the $0.2 million in the corresponding period last year although revenue fell 15 percent to $59.2 million.

The higher net profit was attributed to strong contributions from the Offshore Production Services division -- comprising two Floating Production, Storage and Offloading (FPSO) vessels -- but this was negated by weaker contributions from the Platform Support Vessel (PSV) and small Anchor Handling, Towing and Supply Vessel (AHTS) business segments.

“Amidst the challenging market environment and oil price volatility, we continue to take steps to reduce costs, implement initiatives to improve operational efficiency and increase focus on vessel utilization,” Dunstan said.

Utilization rate in the Offshore Support and Accommodation Services division declined to approximately 70 percent for the quarter amid relatively weak demand for small AHTS and shallow water PSV, which resulted in a utilization rate of 74 percent for the nine months ended May 31. But EMAS Offshore continues to see sustained demand in the larger AHTS segment, where utilization rate remains high at above 90 percent, as vessels of this category are required in the Asia-Pacific and West Africa regions to support various offshore activities.

In the Offshore Production Services division, the two FPSOs, which have high operational uptime of more than 98 percent, are on multi-year contracts and operating in production fields with good long-term production rates and profiles.

“Looking ahead, the short-term outlook for the industry still remains challenging, but we believe that our strategy of focusing our capabilities and maintaining operational excellence in key geographical areas will hold us steady," Dunstan added.


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