Emas stuck in the red

Singaporean offshore contractor runs up small Q1 loss as revenues wane in poor market

Singaporean contractor Emas Offshore is braced for an “extremely challenging” year as it posted a first-quarter loss amid continued dire market conditions.

The Oslo-listed outfit reported a net loss of US$2.2 million in the three months ended 30 November. This was, however, an improvement on the US$3.2 million loss a year earlier.

The latest deficit was due to a drop in revenues from US$49.8 million to US$42.5 million due to “continual weakness in the offshore oil and gas industry leading to lower demand for offshore support vessels,” it said on Tuesday.

Chief executive Adarash Kumar said: “The market is expected to remain extremely challenging for the rest of (the current financial year). Daily charter rates are still expected to remain depressed.”

Emas reported a loss of US$265.3 million for the last full financial year, as against a profit of US$199.5 million a year earlier. This was mainly due to a US$56 million impairment of its holding in Malaysian company Perisai Petroleum Teknologi and the write-off of deposits paid in respect of vessels under construction amounting to $12.2 million.

Emas has been fighting financial woes on various fronts of late. In late December Ocean Yield and Forland Subsea claimed that Emas has failed to keep up payments for the respective bareboat charters of Lewek Connector and Lewek Inspector.

The vessels are on charter to the Emas Chiyoda Subsea (ECS) joint venture, in which Ezra, Chiyoda and Nippon Yusen Kabushiki Kaisha (NYK) hold respective stakes of 40%, 35% and 25%.

Also in late December it reached an agreement with Perisai Petroleum in a dispute over the sale and purchase of put options, agreeing to pay the latter US$43 million.