EMAS Offshore Ltd. posted a net loss of $23.2 million for third quarter of financial year 2016 (3Q FY16) that ended May 31, down from a net profit of $5.2 million a year ago as the industry downturn continue to weigh on the performance of the offshore support, accommodation and offshore production services provider, the company said Friday.
The company's 3Q FY16 revenue declined to $35.1 million, compared to $59.2 million in the previous year as weakness in the offshore industry contributed to lower demand and an oversupply in the offshore support vessels segment.
Despite the market challenges, EMAS Offshore finds the West African market to be promising with increased bidding activities. It plans to further develop its business in West Africa and other regions in order to diversify revenue sources from its established base in Southeast Asia.
“The recent general increase in oil price has calmed sentiments somewhat and we have started to observe a marginal uptick in enquiries for our vessels. That said, as recovery is not expected to be imminent, we remain keenly aware of the softness in this market and will continue to stay vigilant on costs while working to improve efficiency and utilization ... the Group is working on harnessing synergies and tapping into activities of the wider Ezra family to enter into new markets,” Captain Adarash Kumar, EMAS Offshore’s CEO said in the press release.
Meantime, EMAS Offshore has formalized the sale of its entire 41.7 percent equity share in PV Keez Ltd., which owns FPSO Lewek EMAS, through a sale and purchase agreement, with the transaction expected to close on or before Sept. 30. Initial proceeds from the sale is around $17.8 mil and EMAS Offshore will utilized it for debt repayment. The company is also in discussions with various parties on its financial obligations, including securing new working capital facilities, which should be finalized by the end of the current financial year.
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