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Pacific Radiance Q3 profit plunges 87%

Pacific Radiance Q3 profit plunges 87%
The difficult operating conditions in the oil and gas sector have hit Pacific Radiance as the company reported a 87% year-on-year plunge in third quarter profit.

In the quarter ended 30 September 2015, Singapore-listed Pacific Radiance recorded a profit of $1.67m, a sharp fall from the profit of $13.07m in the same period of last year.

Third quarter revenue decreased by 24% year-on-year to $33.76m due mainly to the decline in contributions of its subsea business and its offshore support services business.

The company expects market conditions in the oil and gas sector to continue to be depressed at least for the next few quarters.

“Although we expect market conditions to remain weak for the next few quarters, we are confident that our ongoing prudent balance sheet management and cost management measures will keep us competitive and sustain us for the long journey ahead,” said Pang Yoke Min, executive chairman of Pacific Radiance.

The company anticipates that the current reduction in capital expenditure in E&P by oil and gas players is likely to lead to an eventual reduction in supply capacity, given the depletion rate of existing reserves together with the continually sustained level of global demand for fossil fuels.

Global population growth and urbanisation will continue to drive demand for energy consumption and this provides the tail wind for the industry as a whole in the long run.