EMAS Offshore Posts FY15 Net Profit of $199.5, Thanks to Negative Goodwill

Singapore-based oil and gas services firm EMAS Offshore Limited posted a net profit of $199.5 million for the full year ended Aug. 31, 2015 (FY15), boosted largely by a $154.7 million negative goodwill arising from the completion of the business combination of EOC Limited and EMAS Marine Oct. 3, 2014, compared to $27.5 million in the previous year, the company said in its release of financial results Tuesday.

Net profit for 4Q FY15 reached $36.3 million, up from $12.9 million a year ago, while revenue fell 19 percent to $54.3 million from $67.4 million in the corresponding period mainly due to weakness in both the shallow water platform support vessels (PSV) and anchor handling, towing and supply vessels (AHTS) segments.

“As global concerns continue to affect the oil and gas services providers, we expect the near term pressure to continue. The Group is likely to experience an intense price competition on its charter rates and a tapered rate for its vessel utilization.This will inevitably have an impact on the Group’s operating and financial performance. However, we continue to adopt measures to strengthen our balance sheet and conserve cash. We are focused on opportunities for our offshore assets and accommodation and support services, and barring any major long-term disruption, we will be able to benefit from an eventual upturn,” Captain Adarash Kumar, EMAS Offshore’s Chief Executive Officer, said in the press release.

The firm's Offshore Support and Accommodation Services division reported an offshore support vessel's utilization rate of 75 percent for FY15. EMAS Offshore continues to see strong demand for larger specifications vessels in the AHTS segment, with an utilization rate of over 90 percent for FY15.

Meanwhile, its Offshore Production Services division expects the two floating production, storage and offloading (FPSO) vessels to continue to perform well, with an operational uptime of more than 95 percent for FY15. Contribution from the FPSOs continue to be stable in the past quarter.

“In the face of significant volatility and weakness in the oil price environment, we have taken further steps to reduce cost, targeting a further reduction between 10-20 percent on vessel cost and general administrative expenses. We will continue to streamline the fleet, potentially looking to dispose of smaller tonnage vessels and strengthening the balance sheet through monetization of certain assets. In addition, we have been implementing initiatives to improve operational efficiency and increasing our focus on vessel utilization as we leverage synergies with Ezra Group to win tenders globally. One of our focus areas is West Africa, as we establish new operational readiness for our business,” Captain Kumar added.

Separately, EMAS Offshore reported that it has clinched contracts, worth $33.0 million, for work in West Africa and Asia.


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