Ezra Holdings has booked a loss in the second quarter as the weak market drove the revenues down forcing the Singapore-based offshore contractor to recognise impairments and write offs of bad debts.
The Losses for the three months ending February 29 came in at USD 282.6 million for Q2 2016 and USD 336.4 million for H1 2016, as compared to a profit of US$4.7 million and US$65.3 million in the previous corresponding periods.
Ezra has also seen red in the first quarter, ended November 30, 2015 (1Q2016) when it recorded net loss of $53.7 million, on revenue of $152.3 million.
Charges hit the bottom line
The losses before tax from continuing operations in Q2 2016 included the loss on disposal of fixed assets of USD 18.1 million, impairment loss on fixed assets of USD 60.5 million, impairment loss on investments in joint venture companies of USD 38.3 million and share of losses from an associated company, Perisai Petroleum Teknologi Bhd. In addition, Ezra has recorded impairments, as well as write offs of bad debts, net of USD 18.9 million, and allowance for doubtful debts, net of USD 48.6 million.
Ezra’s quarterly revenue declined some 14 per cent (USD 111.2 million) year-on-year on USD 40.4 million drop from its offshore support and production services division, predominately EMAS Offshore, and a decrease of USD 7.8 million from the energy services division.
EMAS Offshore decline in revenue was mainly due to general weakness in the offshore industry and weak performance in the shallow water PSV and AHTS segments.
Lionel Lee, Ezra’s CEO and managing director, said: “Our performance for the quarter under review has largely been impeded by the lower charter rates and decreased vessel utilisation sustained by our Offshore Support & Production Services division, and this trend is expected to follow on in the ensuing months. The second half of the year will nonetheless continue to be a challenging period for the Group, as we witness reduced oil and gas spending across the globe and ongoing uncertainty in new contract awards.”