Singapore-listed offshore services provider Pacific Radiance posted a lower profit of USD1.08 million, down 94% year on year (y/y) for the first quarter that ended on 31 March 2015, compared with USD17.3 million.
Revenue fell 25% y/y to USD31.5 million in the first quarter, compared with. Gross profit also dropped 43% y/y to USD10.3 million from USD17.9 million, while gross profit margin decreased y/y from 43% to 33%.
The decrease in earnings was mainly attributed to lower vessel utilisation from the company’s subsea business and offshore support services business segment as a result of soft market conditions in the first quarter of 2015.
For instance, Pacific Radiance’s subsea business contributed USD2.5 million in the quarter, down 71% y/y from USD8.6 million. The company’s offshore support services business also contributed lower revenue at USD28.6 million in the first quarter of 2015, down 13% y/y from USD32.7 million.
On the other hand, the company’s expenses increased in its finance cost by 21% y/y to USD2.8 million in the first quarter of 2015 from USD2.3 million. The increase in finance costs was in line with an increase in bank loans and notes payable outstanding from USD298.1 million as at 31 March 2014 to USD357.2 million as at 31 March 2015.
Pacific Radiance expects a challenging business environment ahead for the offshore support service sector, but remains upbeat in weathering the cyclical market downturn.
The company cited in its filing to the Singapore Exchange that it has prior experience in effectively managing market downturns and foresees some market stabilisation over the medium term from the improvement of the oil prices.