Singapore-listed offshore services provider Vikings Offshore and Marine (Vikings O&M) has posted a profit of SGD900,000 (USD672,400) , up 229% year on year (y/y) for the first quarter ended 31 March 2015.
Revenue hiked 40% y/y from SGD15.3 million to SGD21.4 million in the first quarter. The higher earnings were due to the better orderbook back log carried forward from 2014, spearheaded by the heating, ventilation, air-conditioning, and refrigeration systems segment and winches business. In addition, the asset chartering business contributed revenue for the first quarter of 2015 since the contract inception in September 2014.
Similarly, the company gross profit rose 21% y/y from SGD5.2 million to SGD6.3 million in the first quarter of 2015. The gross profit growth was in tandem to the higher revenue growth especially from the asset chartering business segment, which help to offset the lower margin in the offshore and marine services business segment.
Vikings O&M’s other income also increased 81% y/y to SGD0.99 million for the first quarter. The increase was due to favourable exchange gains from the strengthening of US dollars. However, this is offset by the absence of rental income after the end of a long-term sub-letting lease for a building during the first quarter in 2014.
Meanwhile, Vikings O&M has reduced its marketing and distribution expenses by 44% y/y from SGD327,000 to SGD182,000 in the first quarter of 2015. However, the company’s finance cost increased from SGD59,000 to SGD783,000 in the first quarter of 2015, as a result of costs incurred for bank loans and redeemable exchangeable bonds related to the funding of the asset chartering business.
Vikings O&M will continue to exercise prudence in evaluating potential projects contracts amid the challenging offshore and marine industry. In the meantime, the company will be on a lookout for opportunities in acquiring earnings-accretive offshore and marine, as well as related assets in a bid to diversify its revenue mix.