Singapore-listed offshore services provider, Pacific Radiance saw its profit tumble to USD3.8 million down 88% year-on-year for the second quarter ended 30 June 2015.
Revenue dropped by 29% to USD34.8 million in 2Q15 from revenue of USD48.7 million in 2Q14, while gross profit slid by 55% to USD10.1 million in 2Q15 compared to USD22.7 million in 2Q14.
The decline in earnings were attributed to the lower revenue contribution from Pacific Radiance’s subsea business of USD0.4 million in 2Q15, down 97% from USD14 million in 2Q14, as a result of a softer market conditions in 2Q15. Moreover, its offshore support services business dipped by 3% to USD32.7 million in 2Q15 from USD33.8 million in 2Q14.
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Meanwhile, Pacific Radiance’s finance cost increased by approximately USD1.3 million or 63% to USD3.2 million in 2Q15 from USD1.9 million in 2Q14. The increase in finance costs was attributed to the hike in bank loans and notes payable outstanding of USD410.6 million at 30 June 2015 from USD273.7 million as at 30 June 2014.
Despite the tough operating market conditions, Pacific Radiance saw higher usage of its offshore support vessels (OSV). In addition to the improved OSV utilisation, the company’s general and administrative expenses also declined to USD5.5 million in 2Q15 from USD8 million in 2Q14.
The reduction in expenses is part of the ongoing corporate effort in cost saving amid the challenging market environment.
“Moving forward, we expect to intensify our ongoing efforts to manage our revenue and costs in a lower oil price environment,” said Pang Yoke Min, executive chairman of Pacific Radiance.
He expects the company to increase in its marketing and business development initiatives, cost management measures and prudent balance sheet management in weathering the difficult market ahead.