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Thoresen Thai Agencies 2014 profit hits $30.5m, significant drop in Q4

Thoresen Thai Agencies 2014 profit hits $30.5m, significant drop in Q4
Thoresen Thai Agencies (TTA) has reported a THB986m (30.5m) profit for the full year 2014, with gains contracting in the fourth quarter as challenging offshore and dry bulk markets took their toll.

The year's result reverses a THB109m loss in 2013. Fourth quarter net profit across the group fell 38% to THB155m for the fourth quarter, despite a 17% growth in revenue to THB6.2bn.

Flying in the face of general consensus in the dry bulk market, TTA called the market "relatively healthy" when assessing the performance of dry bulk subsidiary Thoresen Shipping, a sentiment that moved to "volatile" and then "weak" as the year's appraisal went on.

Fleet expansion at Thoresen Shipping pushed revenues up 54% to THB7.6bn, with a net profit for the year of THB257m, reversing a THB129m loss in 2013.

For the last quarter revenues were also up 54%, but profit fell to THB19m from THB117m in the fourth quarter 2013 as an anticipated dry bulk recovery failed to materialise and rates fell towards the end of the year.

Subsea and offshore drilling services subsidiary Mermaid Maritime saw revenues and profit rise 15% and 22% respectively to THB10.6bn and THB675m. Again the fourth quarter tells a difference story to the full year figures as a 22% increase in revenue was not enough to stave off a 66% drop in profit to THB82m. The company attributed the profit fall to lower utilisation and tighter margins across both subsea and drilling, a trend that has been seen across the offshore sector as oil majors rein in spending due to the steep drop in the price of oil.

In January 2014 Mermaid ordered two new tender rigs and a dive support vessel at China Merchants Industry Holdings, which are all due for delivery in 2016.

“2015 looks like it will present on-going challenges with the oil and gas industry facing a new lower price environment and the shipping industry also facing uncertainty,” said president and ceo Chalermchai Mahagitsiri.

“We have made significant strategic progress, expanding across the board. We have added a number of vessels to our Thoresen Shipping and Mermaid Maritime fleets. We have opened new Thoresen Shipping offices in South Africa, Europe and the Middle East.

“These successes are particularly impressive in light of the market challenges we have witnessed. Our shipping and oil and gas businesses are facing various market pressures, and we expect this to continue into 2015. We are confident, however, that a prudent approach to operations and the measures we are taking to maintain margins through effective cost controls and industry leading customer service will help us weather this volatile period."