POSH reports 3Q19 net loss widened substantially

PACC Offshore Services Holdings, or POSH, reported Monday its third quarter net loss widened to US$40.43 million, from US$5.34 million in the year-ago period, mainly on impairments related to the POSH Terasea joint venture.

Revenue for the quarter ended 30 September dropped 8 percent on-year to US$73.3 million, the company said in a filing to SGX.

Gross profit for the quarter rose 18 percent on-year to US$16.13 million on improved performance for all business segments except offshore accommodation, the filing said.

Offshore accommodation revenue dropped 31 percent to US$31.9 million in the quarter, largely as POSH Arcadia, one of its two semi-submersible accommodation vessels, came off hire in July following a short-term charter, POSH said.

The impairment of interest in a joint venture was US$25.39 million, and the allowance for doubtful debt was US$13.86 million, POSH reported, saying they were related to investments in and a loan to POSH Terasea (PTPL).

PTPL was 50 percent-owned by POSH and 50 percent-owned by Terasea, which itself is a 50:50 joint venture between Ezion and Seabridge Marine Services. In late October, POSH said PTPL would be voluntarily liquidated by creditors after it defaulted on a facility with an outstanding amount of around US$27.6 million.

For the nine-month period, POSH reported a net loss of US$61.78 million, wider than the US$18.33 million loss reported in the year-ago period, on revenue of US$209.06 million, down 10 percent on-year.

In its outlook, POSH pointed to new contract wins of US$130 million.

“We are encouraged by the major contract wins across both new and core businesses,” Lee Keng Lin, CEO of POSH, said in the statement. “We are also confident that our acquisition of PWPL will allow us to be more agile in capturing new opportunities for harbour services, especially in key overseas markets,” he added.

But the company added that due to continued oversupply putting pressure on utilization and charter rates, it expects its fleet to be further impaired by year-end.

“The impairment amount has yet to be determined and we believe it to be a lesser extent than previous year, but it is expected to materially impact negatively the results of the fourth quarter of 2019 and FY2019,” POSH said.

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