by millionairemind » Thu Jul 09, 2009 8:20 am
Published July 9, 2009
Ezra Holdings Q3 net rises 8% to US$18.8m
Its offshore support services, marine divisions had strong pickup in revenue
By VINCENT WEE
EZRA Holdings posted an 8 per cent rise in net profit to US$18.8 million for its financial third quarter ended May 31, from US$17.4 million a year ago, as turnover rose 9 per cent to US$59.9 million.
'We expect demand for our mid- to large-sized vessels and our offshore support and marine services to remain robust.'
- Ezra's managing director Lionel Lee
On a nine-month basis, net profit plunged to US$43 million from the previous corresponding period's US$168.7 million, the reason being that the latter included a net gain of US$136.3 million from the group's partial divestment of its construction and production arm, EOC Ltd. Excluding the divestment item, nine-month net profit from ongoing activities rose to US$43 million from US$32.4 million as group turnover jumped 58 per cent to US$236.0 million, as all its three divisions performed well.
The offshore support services (OSS) and marine divisions both enjoyed a strong pickup in revenue, while the energy services division contributed US$46.1 million to overall turnover. In addition, both the OSS and marine businesses were able to achieve margin gains.
The OSS division, which made up 60 per cent of turnover for the first nine months, saw improved sales, owing to the full nine-month contribution from Ezra's various new assets progressively coming onstream. Meanwhile, the marine division benefited from increased procurement, equipment supply and engineering activities in Vietnam.
'We expect demand for our mid- to large-sized vessels and our offshore support and marine services to remain robust, supported by the recent influx of contracts awarded by oil majors and national oil companies. On top of this, we plan to explore new market segments that will help us extract greater value for our shareholders,' said managing director Lionel Lee.
Meanwhile, Ezra's Oslo-listed offshore construction and installation arm EOC reported a healthy net profit of US$5.9 million for the third quarter ended May 31, adding up to a total for the first nine months of US$16.1 million.
Gross margin jumped to 53 per cent for the period, a sharp 12 percentage point hike from the previous period's 41 per cent, boosted largely by the term charter contracts which typically offer better margins.
However, the absence of revenue from construction projects, coupled with the mandatory dry docking of the accommodation crane barge Lewek Conqueror, resulted in a 33 per cent lower nine-month turnover of $54.1 million.
'Our strategy is to remain nimble, bidding for projects which offer good returns on our vessels and at the same time, grow a steady and visible income stream from long-term charters. We will continue to drive growth in profitability and improve ROEs via potential capacity increase through acquisition or charters, as well as effective cost and margin management,' said EOC chief executive officer Lim Kwee Keong.
Ezra shares closed four cents lower at $1.11 yesterday.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch
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