SINGAPORE (Nov 10): Ezion Holdings posted a 69.1% decline in 3Q earnings to US$9.4 million ($13.2 million), about a third of the US$30.4 million reported in the same quarter a year ago on lower revenue.

Revenue for the quarter was down 7.4% at US$79.8 million compared to US$86.2 million in 3Q15.

This was mainly due to modifications and routine class surveys conducted on the group’s service rigs; a reduction in charter rates; and the postponement of the commencement of a customer’s project, which resulted in the delay of the deployment of several service rigs.

Cost of sales and servicing for 3Q16 grew 7.4% to US$65.8 million a year ago due to the deployment of additional service rigs.

As a result, gross profit was down 43.9% to US$14 million from $25 million in 3Q15.

In a Thursday announcement, Ezion says it expects the current challenges facing the marine and offshore oil and gas (O&G) industry to continue at least into 2017.

It adds that the group is “working very hard” on meeting the operating requirements of clients, who are “pushing ahead on various field developments and will therefore also require supporting service rigs”, for 2017 and beyond.

To manage its gearing and cash flow while supporting these projects, Ezion says it will work on the possible disposal of at least another existing service rig, as well as mutual agreements with a few of its various stakeholders on the possible delay or cancellation of a few of its past committed projects that “no longer make economic sense”, such that it can avoid unnecessarily increasing its gearing.

It also intends to invite potential joint venture (JV) partners to co-own some of the group's assets whenever necessary.

“The company is also aware of the severe financial difficulties faced by its partners as a result of the very adverse current market conditions, and is deeply sympathetic with their problems,” says Ezion.

“While the group is doing all it can to assist in the JVs' operations, the group has in place contingency plans to deal with the possibly worsening situation, and does not expect to be materially affected.”

Shares of Ezion closed 1 cent lower at 31 cents on Wednesday.

Ezion’s 3Q earnings sink 69% to US$9 mil on lower revenue

DBS says it remains buyers of Digital Core REIT after further downside in price

RHB sees Frasers Centrepoint Trust as potential contender for Mercatus assets

Uni-Asia Group well placed to gain from surging charter rates: PhillipCapital

Opening up to new horizons: Digital assets as a means of settlement in cross-border transactions 

Three-quarters of Singaporeans answered scam calls recently: Toku  

Businesses in Singapore eager to hire international talent with the rise of remote work

Ezion’s 3Q earnings sink 69% to US$9 mil on lower revenue

Related Stories

Highlights

ARA US Hospitality Trust to sell four Hyatt Place hotels for US$32.5 mil

Related Stories

Samurai 2K's reports higher revenue but earnings held by higher costs

Singapore Shipping Corp sees 10.2% higher earnings despite lower revenue from ship owning business

IHH Healthcare reports earnings of RM493 million for 1QFY2022, up 31% y-o-y