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Unaudited Financial Statement And Dividend Announcement For The First Financial Quarter 31 March 2017

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Consolidated Statement Of Comprehensive Income

Profit & Loss

Balance Sheet

Balance Sheet

Review of Performance
1Q2017 vs 1Q2016


Review of Performance


  1. Offshore & Engineering includes offshore structures, engineering, manufacturing, inspection and maintenance. This also includes rope access services.
  2. Marine includes stearngear manufacturing and refurbishment works, ship inspection, repair & maintenance services and engineering & fabrication works. This also includes diving services.
  3. Energy Services includes oil sludge and slop reclamation, hydro cleaning oil and gas tanks, encapsulation of wastes prior for landfill disposal and design and launch carbon footprint management initiatives and green initiatives.

Overall, revenue in 1Q2017 decreased by 36% or $7.3 million to $12.8 million as compared to $20.1 million in 1Q2016 mainly due to weaker revenue in the Offshore & Engineering segment. When compared to 4Q2016, revenue for the current quarter was up by 77% or $5.5 million arising mainly from both the Offshore & Engineering and Marine segments.

Offshore & Engineering segment

Revenue from the Offshore & Engineering segment in 1Q2017 was $3.6 million, decreased by $6.6 million as compared to $10.2 million in 1Q2016, but was up by $3.5 million when compared to 4Q2016. The order book at the start of 1Q2017 was lower than at the start of 1Q2016, primarily a result of continued low oil prices that brought about a general decline in demands from customers. Quarter-on-quarter revenue was up by $3.5 million due mainly to additional work done for those remaining projects in the later part of 2016.

Marine segment

Revenue from the Marine segment declined marginally by approximately 2% or $148,000 to $6.4 million in 1Q2017 as compared to last year same period. Quarter-on-quarter, revenue was up 76% or $2.8 million due mainly to recognition of new build projects that was secured between end of 4Q2016 and 1Q2017 .

Energy Services segment

Revenue from Energy Services was $2.8 million, a 17% decline from 1Q2016 of $3.3 million and also a decline of $$664,000 or 19% as compared to 4Q2016.

The decline in revenue in 1Q2017 as compared to 1Q2016 is due to lower work volume from one of its major customers. The decline in quarter-on-quarter revenue of $664,000 was mainly attributable to a one off project recognised in 4Q2016.

Cost of sales, gross profit and gross profit margin

With a lower Group's revenue, cost of sales also decreased by approximately 16% or $2.3 million to $12.5 million in 1Q2017. This reduction was however not in proportion with the fall in revenue, as revenue from the Offshore & Engineering segment is insufficent to cover its fixed running costs. Consequently, gross profit decreased from $5.2 million in 1Q2016 to $0.3 million in the current reporting period.

Other income

Other income remains comparable at $312,000.

Administrative expenses

The Group's administrative expenses increased by $378,000 or 10% to $4.2 million in 1Q2017, mainly due to higher depreciation expense in relation to 2 properties being reclassified from disposal group to property, plant and equipment.

Finance expenses

Finance expense decreased by 11% or $170,000 from $1.5 million in 1Q2016 mainly due to lower interest rate on the bank debt refinancing of $50 million term loan.

Income tax

The Group recognised a tax charge of $30,000 due to under provision of income tax in prior financial years.

Net profit

The Group survived an especially tough few years in oil and gas business with weak demand and low prices and despite the uptick in revenue quarter-on-quarter, this slight improvement is insufficient to turn around profitability in a short period of time. Thus, the Group registered a net loss position of approximately $4.95 million in 1Q2017.

The net profit attributable to non-controlling interests decreased by $181,000 or 53% to a net profit of $162,000 in 1Q2017 mainly due to lower revenue recognised in 1Q2017 in Energy Services segment as discussed above.

The Group incurred a net loss attributable to Equity holders of the Company of $5.1 million as compared to net loss of $104,000 in 1Q2016.


Current assets

Current assets showed a marginal decrease of 1% or $276,000 from $70.6 million as at 31 December 2016 to $70.3 million as at 31 March 2017, mainly attributable to decrease in trade and other receivables of $5.2 million as a result of intensive collection efforts from management, offset by increase in cash and cash equivalent of $4.3 million.

Non-current assets

The marginal decrease of 2% or $4.2 million in non-current assets from $271.8 million as at 31 December 2016 to $267.6 million as at 31 March 2017 is mainly due to depreciation expense of approximately $4.0 million.

Current liabilities

Current liabilities increased by approximately 6% or $3.9 million to $68.6 million as at 31 March 2017 is mainly due to the call on a performance bond related to breaches of contract and delays accounted for under other payables.

Non-current liabilities

The non-current liabilities marginally decreased by 2% or $2.9 million from $155.6 million as at 31 December 2016 mainly due to monthly repayments of long-term loans.

Disposal Group classified as held-for-sale

The Group reclassified certain assets and liabilities under disposal group as held-for-sale as part of the key initiatives of management to dispose some under utilised assets for cost savings and improve the cash flow position.


The Group's generated a net cash inflow from operating activities of $10.7 million, mainly arose from intensive collection efforts in trade and other receivables of $5.2 million and increases in trade and other payables of $5.8 million.

Due to the uncertainties experienced in the oil and gas turmoil, the Group recorded a minimal investing actitivities during 1Q2017. The marginal purchase of fixed assets is from the Energy segment for its expansion of services to customers.

The Group's financing activities has a net cash outflow of $6.1 million as at 31 March 2017 due to repayments of term loans and hire purchase of approximately $4.3 million and interest payments of $1.8 million during 1Q2017.


As oil prices remain low, demand for repair and maintenance of rigs and related goods and services has not picked up. Given the general macro view in the marine and offshore industry, we do not expect the operating condition for our businesses improving significantly in the next 12 months.

We will continue to actively explore diversification opportunities into our Energy segment, as well as non oil and gas engineering works. Barring unforseen circumstances, we expect these segments to grow. The Group will continue to manage costs and cash flow prudently. Group's order book as at 31 March 2017 stands at $10.2 million (as at 31 December 2016: $12.1 million).