Pacific Radiance suffers four quarterly losses in a row

It reports $22.2m net loss in 3Q.

Pacific Radiance (PACRA) reported its fourth straight quarter of losses, with core net loss of US$16m (S$22.2m) in 3Q16.

It recognized an impairment charge of US$2m on receivables, mainly from Swiber (~US$10m in total recognized).

KGI Securities however believes that upside in 2017 may come from an industry-wide rerating catalyst based on a sustained oil price recovery >US$60/bbl, although the OSV sector may still require 1-2 years before the vessel upply/demand dynamics return to balance.

It also notes that there are at least some good news as the firm refinances debt.

PACRA has indicated that it has only 1 vessel for delivery remaining. No more significant capex is expected from FY17 onwards. Cash flow remains weak as it recorded its third consecutive negative operating cash flow of -US$12m in 3Q16 (-US$11m in 2Q16, -US$15m in 1Q16). Its net gearing has increased to 1.6x currently from 1.5x in the previous quarter.

However, KGI said that PACRA has secured support from its key lenders and has managed to refinance US$185m of loans due in the near-mid term. Its term loans have been refinanced to 12 years from an average of 7 years previously at similar interest rates to its existing debt.