Ezra's Profit After Tax Declines 96% to $0.4M in 3Q 2015

Ezra Holdings Ltd., a Singapore-based contractor and provider of integrated offshore solutions to the oil and gas industry, posted $400,000 in profit after tax (PAT) for third quarter 2015 (3Q 2015) ending May 31, down a hefty 96 percent from $$10.2 million a year ago, according to company which released its quarterly financial results Friday.

Revenue fell 3 percent during the quarter to $390.7 million, compared to $402.1 million last year due to a difficult market environment caused by the downtrend in gloabl oil prices.

“Despite recent market challenges, Ezra has managed to maintain its revenue this quarter. We acknowledge that market conditions remain difficult, but we see that the longer-term prospects in the industry are showing gradual improvement. The Group is currently working to rationalize non-core assets to accelerate the deleveraging of and strengthening the Group’s balance sheet,” Lionel Lee, Ezra’s Group CEO and managing director, said in the press release.

Income contribution from EMAS AMC, Ezra’s Subsea Services division, decreased by $21.0 million in 3Q 2015 compared to the previous year. This results from projects being in the earlier phases of execution currently, leading to a lower percentage of completion recognition compared to the corresponding period. But demand for the EMAS AMC's services remains as illustrated by its recently signing of a six year Long Term Agreement with Saudi Aramco, with exercisable options to extend for another six years (2x3 years), in a consortium with India's Larsen & Toubro Hydrocarbon Engineering.

Revenue from EMAS Offshore Ltd., Ezra's Offshore Support and Production Services division, declined $16.1 million in 3Q 2015 from a year ago. This was caused mainly by weakness in both the shallow water anchor handling, towing and supply and the shallow water platform support vessels segments as well as the absence of revenue contribution from one leased-in vessel which was returned to the owner in the second half of 2014. Still, EMAS Offshore recently announced new contracts worth more than $54 million in the Gulf of Thailand and West Africa.

Meanwhile, Ezra's Marine Serviced unit TRIYARDS Holdings Ltd. reported a year-on-year increase of $25.7 million in revenue for 3Q 2015 due mainly to a new source of revenue contribution from its newly acquired Strategic Marine entities, namely Strategic Marine (S) Pte. Ltd. and Strategic Marine (V) Company Limited. TRIYARDS recently clinched new contracts worth $175 million.

“We continue to win projects across the group, with total contract wins in excess of $800 million, including options, in the past three quarters. We feel that we are in a better position to ride through the tough market conditions, after implementing successful cost efficiency initiatives. At the same time ... we will continue maintaining our cost discipline to improve margins and shareholder value ... In addition, we have no more material capital expenditure with Lewek Constellation now fully operational and working in the Gulf of Mexico. We can thus focus our efforts on cash flow generation moving forward,” Lee added.


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