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Quarterly Report For The Financial Period Ended 31 December 2017

Financials Archive

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Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Fourth Quarter ended 31 December 2017 (Unaudited)

Income Statement

Condensed Consolidated Statement of Financial Position as at 31 December 2017 (Unaudited)

Balance Sheet

Review of performance of the Company and its principal subsidiaries

The Group's performance for the quarter under review versus the corresponding quarter of the previous financial year is tabled below:

Review of Performance

Comparatively, the Group's revenue for the current quarter ended 31 December 2017 decreased by 13% while the group made a loss before tax of RM6.3 million for the current quarter as opposed to profit before tax of RM41.1 million in the corresponding quarter ended 31 December 2016.

The decrease in revenue in the current quarter is mainly due to lower work orders received and performed.

The group registered a loss before tax in the current quarter due to lower profit margins from lower charter rates and taken into account expenses such as net realised/unrealised foreign exchange loss of RM19.6 million as compared to net realised/unrealised foreign exchange gain of RM48.9 million in the corresponding quarter.

The loss after tax of RM56.9 million in the current quarter had taken into account of current year tax expenses of RM0.6 million and deferred tax expense of RM52.8 million (refer note B5).

In the opinion of the Directors, the results for the current quarter have not been affected by any transactions or events of a material nature which have arisen between 31 December 2017 and the date of this report.


Generally, for 2017 business activities have only improved slightly as a couple of contracts namely the Topside Structural Maintenance (TSM) and the Facilities Improvement Project (FIP) expired in June 2017 and the group were awaiting the award of the Maintenance Construction and Modification (MCM) Contract. Group revenue for 2017 was slightly better by RM12.7 million compared to that of the corresponding year for 2016.

The Group suffered a net loss of RM152.2 million in 2017 as compared to a net profit of RM53.98 million in 2016. Financials for the year 2017 was greatly down because of mostly one-offs impairments on PPE of RM32.9 million, impairment loss on receivables of RM1.4 million and unrealised foreign exchange loss of RM52.0 million. The loss after taxation had taken into account the deferred taxation of RM52.8 million.

In reality, the Group is experiencing an increase in work activities and profitability for the topside maintenance services (TSM), Hook-up and Commissioning (HUC) contracts, Engineering Procurement Construction and Commissioning (EPCC) services despite a drop in fleet utilisation of its 25 offshore support vessels and drop in vessel charter rates by some 25%. The fleet utilisation rate of the vessels have dropped from 58% in 2016 to 52% in 2017.

Going into 2018, the Group will continue to draw down its revenue from its balance contract order book of RM2.8 billion that stood as at 31 December 2017. The Group will continue to operate within the core competencies of the new Maintenance Construction and Modification (MCM) contract and also the remaining HUC and EPCC contracts and OSVs charter. Based on current work orders received from the oil majors and the work planning activity programs that are on hand currently, it is therefore envisaged that 2018 should be a very busy year and we remain upbeat. The MCM, Pan HUC and EPCC is now experiencing more renewed activities as the price of crude is now hovering above USD60 per barrel.

It should also be noted that the Group is currently awaiting the results of some tenders for contracts with oil majors that are still under evaluation. Any successful win in this should see a further replenishment of the order book lasting for one to five years. Though it is not possible to predict the outcome of these tenders, the Group has always demonstrated its operational and technical supremacy in winning these brownfield contracts.

At PPB it should be noted that the fleet utilisation should improve going into 2018 as more than 9 vessels out of a fleet of 16 will be earmarked for Dayang's offshore maintenance, hook-up commissioning and EPCC contracts, in line with the roll-out of Dayang's contracts with various oil majors.

The Board is well briefed of the Group's outlook on a much improved prospect going into 2018. Nevertheless, the Board will remain cautious and vigilant in its pursuit for more contract replenishment and in the management of the Group cashflows and the sustenance of the Group in a very challenging market environment. The Board will continue to exercise due care and prudence in the running and administration of the company's business amidst yet a very challenging industry.

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