EOC noted that its fleet continued to enjoy high utilization in chartering for the first quarter ended November 30, 2008 (1Q FY09), driven by demand from clients keen to raise and maintain the efficiency of existing offshore oil & gas fields in the Asia-Pacific.
The high fleet utilization for asset specific opportunities eliminated the need for third-party charters. This, together with the absence of project-based construction work and a moderately lower average charter rate, reduced revenue by 28% to US $19.5 million in 1Q FY09, but the Group enjoyed an improved gross profit margin of 59% (1Q FY08: 52%).
The Group's investment in its expanded operations resulted in administrative expenses increasing to US $3.4 million in 1Q FY09, due largely from the addition of operations personnel. Interest charges, on the other hand, declined 34% year-on-year (yoy) to US $1.8 million because of lower rates, despite the Group’s higher gross gearing of 2.6 times (1Q FY08: 2.1 times). EOC's lower tax charges also helped to arrest the fall in net profit, which came in at US $6.1 million, down 26% yoy.
Lim Kwee Keong, EOC's Chief Executive Officer, said, "The outlook for construction & production services in the offshore oil & gas sector remains positive, driven by demand from clients who are moving to boost the output and efficiency of producing fields in the Asia-Pacific.
"Most of our vessels are on charters for long term opportunities as they cater mainly to the production phase of existing fields. We will continue to pace our expansion according to the needs of our major clients, moving in tandem to add value to their operations."
The Group currently owns and operates two heavy lift accommodation crane barges and a dynamically positioned heavy lift accommodation pipelay vessel, as well as a floating production, storage and offloading unit.
Mr. Lim added, "EOC will continue to actively manage our working capital requirements and keep our fleet well-deployed to improve returns to shareholders."
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