Malaysia-listed offshore services provider Icon Offshore posted a profit of MYR2.7 million (USD700,000), down 86% year on year (y/y) for the first quarter ended 31 March 2015 because of lower vessel utilisation.
Revenue dropped by MYR16.5 million or 20.5% to MYR63.6 million in the first quarter of 2015 as compared with MYR80.1 million in the same period in 2014.
The decrease was primarily due to lower fleet utilisation rate of 64% for the first quarter in 2015 as compared with 79% for the first quarter in 2014, arising from lower demand and slower activities in oil and gas industry. However, this was partly offset by contribution from a new accommodation work boat (AWB) in the first quarter in 2015.
Similarly, the company’s gross profit decreased by MYR20.5 million or 47.1%, from MYR43.6 million for the first quarter in 2014 to MYR23.0 million for the first quarter in 2015.
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This was due to the increase in cost of sales at MYR40.5 million, up 11.2% or MYR4.1 million in the first quarter in 2015 as compared with MYR36.5 million in the first quarter in 2014. The higher costs were attributed to the fuel consumption incurred for vessels that are available for charter, as well as vessels on dry dock.
In the meantime, there was an increase in Icon Offshore’s administrative expenses by 51.3% to MYR11.7 million in the first quarter in 2015 from MYR7.8 million in the first quarter in 2014. The increase in expenses was attributed to higher payroll cost due to higher headcount to support fleet expansion and foreign exchange loss incurred during the first quarter in 2015.
Meanwhile, the company’s other expenses dropped by 67.5% y/y to MYR0.8 million in the first quarter in 2015 due to lower amortisation of intangibles assets during the period.
Going forward, Icon Offshore expects the industry outlook to remain soft underpinned by the weak oil prices. However, the company has a significant portion of its orderbook locked in long-term basis with more than one-year duration in nature. In the meantime, Icon Offshore will remain focused to ensure its utilisation rate is maintained through competitive tendering for domestic and regional work.