Singapore: Ezra Starts New FY with 54 Pct Surge in Revenue and 44 Pct Jump in Gross Profit

Ezra Holdings Limited (Ezra or the Group) a leading contractor and provider of integrated offshore solutions to the oil and gas (O&G) industry, ushered in its new fiscal year with a 54% surge in revenue to US$278.7 million and a 44% jump in gross profit to US$49.9 million for the three months ended November 2012 (1Q FY13), over the previous corresponding period.

The strong step-up in subsea activity at EMAS AMC contributed US$86.2 million to the US$98.2 million increase in the Group’s sales for the quarter, while its offshore support services division under EMAS Marine added another US$9.0 million as charter income rose. The growth in charter income was due mainly to the inclusion of three months of operations for one anchor handling tug and supply (AHTS) vessel and two platform supply vessels (PSVs).

Earnings continued to trend up at EMAS AMC, after it enjoyed a turnaround in operations in 4Q FY12. This, together with steady charter rates for an enlarged offshore support fleet, pushed the Group’s gross profit up 44% to US$49.9 million in 1Q FY13. The Group’s gross profit margin, however, dipped from 19% in 1Q FY12 to 18% in the current reporting quarter as Ezra’s subsea services operations are still being ramped up.

Ezra’s Managing Director, Mr Lionel Lee, said: “We are pleased with the progress achieved by EMAS AMC, which is currently driven by subsea projects from our growing orderbook.

“EMAS AMC continues to build up its capabilities, and the delivery of our major subsea vessels will not only open up new and exciting opportunities, but also place Ezra in a solid position to ride the strong wave of global subsea activity.”

The Group will further expand its modern construction fleet with the exclusive charters of two additional strategic pipelay installation assets – a dynamically positioned (DP) dual reeled-lay vessel and a deepwater DP S-Lay vessel, giving the subsea services division the capability to efficiently lay conventional and deepwater pipelines up to 30 inches in diameter.

These new additions will be introduced in the second and third quarter of this calendar year and suitably complement the Group’s other construction assets, such as the Lewek Connector and Lewek Constellation. EMAS AMC can now offer and deploy a wide spectrum of vessel capabilities that will give increased access to a range of conventional and deepwater subsea activity in key areas, such as the Gulf of Mexico, Africa, the North Sea and Asia-Pacific.

The subsea services division further plans to take delivery of the Lewek Constellation, a DP-3 ice-class deepwater multi-lay vessel with portable reels on deck and heavy lift capability up to 3,000 metric tonnes in 2014.

The Group also recorded a net attributable profit of US$6.8 million for 1Q FY13, against US$13.3 million for the previous corresponding quarter. This decrease was mainly attributable to higher personnel costs incurred to build up the subsea services division’s manpower base in preparation of new projects and vessels, lower contributions from associated companies and higher financial expenses in respect of the Group’s expansion programme.

Mr Lee noted: “We continue to build our subsea tendering, engineering and execution team in anticipation of our new vessels and projects which has led to the current disproportionate general and administrative expenses relative to revenue. However, we expect stronger operating leverage and efficiencies in the second half of the financial year as subsea activities ramp up. This will continue to improve in the longer term as the general subsea infrastructure we build today will be sufficient to support us for years to come.”

The Group’s administrative expenses increased 34% year on year to US$35.8 million but moderated from US$43.0 million in the prior quarter (4Q FY12), down approximately 17%. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased US$4.2 million, or 12%, year-on-year to US$38.7 million in 1Q FY13.

Commenting on the Group’s prospects, Mr Lee said: “A gradual recovery in the offshore support services sector as well as our focus on improving operational efficiency and our continued ability to deliver a growing orderbook positions the Group well to reap the benefits through the rest of FY13.”

The Group also announced multiple new contract wins totalling more than US$160 million. The contracts involved the Group’s various business divisions, and are located across the North Sea and Asia Pacific regions.

[mappress]
Press Release, January 14, 2013; Image: