Ezra Reports 34 Pct Increase in Revenue and Gross Profit, Singapore

Ezra Holdings Limited (Ezra, the Group), a leading contractor and provider of integrated offshore solutions to the oil and gas (O&G) industry, reported a 34% increase in both its revenue and gross profit for the half-year ended 28 February 2013 (1H FY13).

The Group saw revenue rise to US$525.8 million from US$392.3 million in 1H FY12. In addition, gross profit increased to US$92.2 million, up from the US$69.0 million booked in the corresponding period a year ago. EMAS AMC, Ezra’s Subsea Services arm, led the contribution to the top line, accounting for US$107.1 million of the US$133.5 million jump in the Group’s sales for 1H FY13. The offshore support services division added another US$9.7 million while the marine services arm (TRIYARDS) contributed US$16.7 million.

Despite short-term headwinds in the global subsea industry, the Group was able to hold its gross profit margin steady at 17.5% as compared with the 17.6% achieved previously. Ezra also booked a net attributable profit of US$36.4 million, compared with US$35.4 million in 1H FY12.

Ezra’s Managing Director, Mr Lionel Lee said: “Industry players across the subsea sector faced unexpected postponement of project awards and execution as well as supply chain bottlenecks, tempering the outlook for the segment this year. Even so, Ezra managed to hold its own in 1H FY13, and we believe that prospects for the subsea sector remain strong over the medium to long term.

“We will continue to keep a keen eye on our projects, upholding our commitment to executing these successfully, on time and within budget. In addition, we will continue to sharpen our engineering and support infrastructure for existing as well as projects likely to come our way during the next three to five years as the subsea market expands.”

To ensure that the Group will be ready to capture these opportunities as they open up, Ezra has invested heavily in both its people and its processes, having recognised early on that a lack of subsea engineering expertise would be a major constraint on growth within the industry. Having broadened and deepened its engineering and project management capabilities, Ezra is now able to meet even the most exacting demands in the subsea industry.

The Group has also taken steps to streamline its global supply chain and fine-tuned project tracking systems. Operational efficiencies will continue to be a key priority in 2013 with a focus on improving project management processes.

With more effective management of working capital, the Group was able to improve operating cashflows and trimmed net gearing to 0.9x in 1H FY13 from 1.1x in FY12.

Ezra has assembled a well-balanced portfolio of project enabling subsea construction and supporting assets that will set EMAS AMC apart in the subsea industry, especially with the Lewek Constellation – an ice-class deepwater multi-lay vessel with heavy-lift capabilities expected to be ready by 2014.

Mr Lee noted: “Having successfully emerged from a challenging period of integration, Ezra now has the building blocks it needs to carve out a prominent position in the subsea sector, where tendering levels remain strong. We remain positive about the sector’s outlook over the medium to long term, and about the Group’s ability to increase its orderbook once contract awards resume. For now, the priority is boosting operational efficiency – an area where we expect to see significant improvements thanks to the measures we have set in motion.”

The Group continues to maintain a healthy order backlog of more than US$2.1 billion of contracts spanning the globe with its subsea division underpinning more than half of these projects. The subsea division secured approximately US$430 million worth of contracts in 1HFY13 and EMAS AMC subsequently announced awards in the North Sea from Det norske and Statoil in March 2013, totalling more than US$165 million. In addition, the division has today separately announced project awards in West Africa and the Gulf of Mexico worth approximately US$75 million in total, which increases its subsea backlog to more than US$1.1 billion.

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Press Release, April 12, 2013