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Icon Offshore adopts measures to ride out downturn

Icon Offshore adopts measures to ride out downturn
Icon Offshore is confident of overcoming its short-term challenges after rolling out initiatives to reduce capital costs, optimising and renewing its fleet and building up its long-term fundamentals, local reports said.

Md Amir Hamzah Azizan said the main priority of the company is to take necessary and financially prudent steps to see out the current tough market conditions.

"This includes restructuring our capital and operating cost structures to focus on quick wins, and driving fleet utilisation through competitive bidding.

"As a result of our financial discipline focusing on cost optimisation and conserving cash flow, Icon continues to win new business through its competitive services.

“Through its current initiatives, Icon is taking advantage of the current industry down-cycle by reshaping itself to capitalise on any recovery and to explore transformational and consolidation activities such M&As and diversification," he said.

The company has aggressively bid for new contracts in the last six months with the most recent being a Letter of Award from ExxonMobil Exploration and Production Malaysia Inc (EMEPMI) in May this year worth MYR42m ($10.4m).

Other measures include delaying the delivery of four new vessels, as the company seeks to conserve cash and ride through the current overcapacity situation.

“We want to bring in these vessels when the market improves,” Amir Hamzah said.

The deferral of the delivery will also mean expenditure for the vessels of about MYR90m, which was to be spent this year, will be pushed back, improving the group's cashflow situation for this year. Amir Hamzah added that the vessels will be put on milestone payments.

He added that the company had also been in talks with banks on the possibility of restructuring their loans to reduce the burden on their cash.

Amir Hamzah also said the group was now aggresively bidding for contracts in Brunei as part of its regionalisation strategy and to boost its order book, which as at March 31, 2016, stood at MYR640m.

"We like Brunei at this point of time. We have two vessels which have been successful in that market. We have traded in 10 other countries before, the key is to not trade opportunistically, but to penetrate and to stay in these markets," Amir Hamzah said.

“We have done this in Brunei, so we have to see if we can do the same in other countries,” he added. Amir Hamzah also said Icon Offshore is looking at other opportunities for long-term business in the region as well as options for merger and acquisitions possibilities.