PACC Offshore horribly misses targets with 27.4% profit plunge in FY14

Blame it on idled vessels, loss-making JVs.

PACC Offshore reported disappointing results for its first year of listing on the SGX.

The group reported a net loss of $13.6m (USD 10m) in the fourth quarter, which dragged overall FY14 net profit down to $72.2m (USD 53.2m).

Maybank Kim Eng classifies these results as a “serious miss”. The declines were caused by further losses from its Mexico JV, which continued to lose money as vessels were idle.

Its second SSAV, POSH Arcadia, which is scheduled for mid- 2015 delivery, also remained uncontracted.

“POSH is aiming for a Petrobras charter. We see deteriorating markets in Mexico and Brazil. Pemex has cut its budget by 11.5%. Petrobras is engulfed in a corruption probe on top of weak oil prices. Management said it will seek jobs outside Mexico and curtail operating expenses. POSH will also defer some newbuildings. It had committed capex of USD250m at end-FY14, of which USD130m was to be paid out in FY15E. We believe this is prudent as cash conservation is vital now, even though Kuok Group offers strong financial backing,” noted Maybank Kim Eng.