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POSH plunges to $371m loss in 2016 hit by huge impairments

Kuok Group’s PACC Offshore Services Holdings (POSH) plunged to $371.4m loss for 2016 hit by $310.1m in impairments on assets and goodwill.

The $371.4m loss for Singapore-listed POSH last year compared to a $130.9m loss in 2015. Revenues fell by 35% year-on-year to $183.1m compared to $280.8m in 2015.

Revenues in the fourth quarter of 2016 fell by 49% to $36.7m compared to $71.8m in the corresponding period a year earlier. “This was mainly due to lower utilisation and charter rates across its major business segments,” POSH said.

With the plunge in vessel values in the offshore sector the company took impairments of $198.9m on its assets and a further $111.2m impairment on good will. Excluding impairments POSH reported a net loss of $61.3m.

In the OSV segment Q4 revenues for 2016 were down 51% $16.7m compared to $33.9m in the same period a year earlier. The segment racked up a $4.9m loss for the quarter.

“Lower day rates during this period were a result of discounted rates on existing contracts and reduced rates for new ones,” POSH said.

The offshore accommodation business saw revenues fall 56% in Q4 2016 to $11.8m compared to $26.8m in Q4 2015. The segment reported a $2.2m loss for Q4 2016.

The company said the result was due “mainly on lower charter rates and utilisation for its shallow water vessels, as well as lower rates for its POSH Xanadu semi- submersible accommodation vessel upon its contract extension”.

Looking ahead POSH said the oil and gas sector remained depressed and the timing of a recovery was uncertain.

“We expect market conditions to remain challenging in 2017. We will maximise utilisation of our vessels as long as it generates positive EBITDA,” said Gerald Seow, ceo of POSH.

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