Singapore-based Ezra Holdings is set to divest its largest floating production and storage offloading (FPSO) unit, the Lewek EMAS, in efforts to step away from the ownership of FPSO assets and streamline resources, the company revealed in its 1H 2016 report.
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Image from Ezra. |
Although the company has suffered from the weakness in the offshore support sector, and has endured impairments on assets, Ezra was able to increase its revenue this period to US$263.4 million, when compared to 2H 2015’s $257.1 million, representing a 2.5% increase that the company is contributing to its marine services division, Triyards.
As of 7 April, Triyards secured a total of $17.8 million in new orders, which include three windfarm support vessels.
However, the company’s gross profit took a 70% hit, with $15.5 million reported in 1H 2016, compared to $51 million year-on-year. Ezra said the decrease was mainly due to the weakness in the offshore support and production services division, especially with its smaller platform supply vessel and anchor handling supply vessel segments.
“Our performance for the quarter under review has largely been impeded by the lower charter rates and decreased vessel utilization sustained by our offshore support and 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,” Lionel Lee, Ezra CEO and managing director said.
Although both of its FPSOs, the Lewek EMAS and Perisai Kamelia, continued to perform operationally well in Q2, Ezra announced that just yesterday (14 April), the company is proposing to divest its Lewek EMAS FPSO, a decision that is in line with its strategy to move away from ownership of FPSO assets and streamline resources, according to Ezra’s 1H 2016 report.
In addition, according to the filing in Singapore, Ezra’s EMAS Offshore Production Service (Vietnam) entered into a non-binding letter of intent to sell its 41.7% equity share in PV Keez to an international energy infrastructure fund. Singapore-based PV Keez offers FPSO and related services, and owns the Lewek EMAS, which is currently chartered to Premier Oil Vietnam Offshore, the operator of the Chim Sao field, offshore southern Vietnam.
EMAS Chiyoda Subsea
On 31 March, Ezra completed an investment in its subsea services division, EMAS AMC, to form a 50:50 JV with Chiyoda, called EMAS Chiyoda Subsea.
Though the new partnership, Ezra said that the JV will be able to undertake larger, and more complex offshore engineering, procurement, construction, and installation projects. For offshore oil and gas projects, and offshore renewable energy projects, EMAS Chiyoda Subsea handle the provisions of decommissioning services, and the life of field service, among other things.
“The group remains committed to stay on track for the rest of FY2016 to ride out the industry headwinds. Boosting our liquidity and strengthening our balance sheet remain our key priorities, as we are taking steps on the refinancing front and through the divestment of non-core assets. We will continue to focus on operational excellence and debt structure optimization to tide over the difficult market conditions. With the EMAS Chiyoda Subsea JV having commenced operations in April, we believe the group is in a better position to secure larger contracts as we are now able to leverage on the combined expertise together with a strong partner,” Lee said.
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