Singapore-listed offshore services provider Kim Heng Offshore & Marine Holdings (Kim Heng Offshore) posted a profit drop of 72% year on year to SGD1.105 million (USD0.83 million) for the first quarter ended 31 March 2015.
The decline contrasted with its profit of SGD3.89 million in the first quarter of 2014.
This was followed by the drop of revenue at SGD16.3 million, down 31% in the first quarter of 2015 as compared with SGD23.6 million in the first quarter of 2014. Kim Heng Offshore stated in its filing to the Singapore Exchange (SGX) that the drop was due to the decrease in revenue from the offshore rig services and supply chain management segment of SGD9.1 million.
However, the company’s revenue increased to SGD1.8 million from the vessel sales and newbuild segment due to the recognition of revenue from a vessel new build project in the first quarter of 2015. This higher revenue then helped to partially offset the decrease in revenue from the offshore rig services and supply chain.
Overall, Kim Heng Offshore cited that the offshore market was bearish due to the continued low demand for maintenance of rigs and related goods and services from its customers as oil prices remain low.
Moving ahead, the company expects the offshore market to remain volatile and challenging in the next 12 months due to the low activities of offshore oil and gas exploration and lacklustre demand for maintenance of rigs and related goods and services.
In the meantime, Kim Heng Offshore will continue to assess potential merger and acquisition opportunities, made available by its strong cash position to capitalise on further expansion activities and additional projects within the energy sector.