Lower OSV utilisation rate drags Alam Maritim 1Q profit by 44.89%

by **Cals** Thu 21 May 2015, 22:43

Lower OSV utilisation rate drags Alam Maritim 1Q profit by 44.89%

KUALA LUMPUR (May 21): Lower average utilisation rate of offshore support vessels (OSV) and lower revenue from the offshore installation & construction (OIC) segment had dragged [size=14]Alam Maritim Resources Bhd ([You must be registered and logged in to see this image.]Financial Dashboard)’s net profit down by 45% to RM8.59 million for the first quarter ended March 31, 2015, against RM15.59 million a year ago.
In a filing to Bursa Malaysia today, Alam Maritim (fundamental: 1.6; valuation: 1.5) said the profitability of the OSV segment was lower by 34.7%, primarily due to lower average utilisation rate of OSV.
Similarly, its subsea services/OIC segment also registered a 37.2% lower profit before taxation of RM1.38 million the 1QFY15, versus RM2.19 million last year, due to significantly lower revenue registered by OIC segment during the current financial quarter.
Alam Maritim’s 1QFY15 revenue dropped slightly by 6.88% to RM73.71 million, from RM79.15 million last year.
“Revenue from Offshore Support Vessels ("OSV") segment dropped by 48.4%, due to lower average vessel utilisation rate,” it said.
However, revenue derived from subsea services/OIC segment was higher, exceeding 100% as compared to last year, mainly due to revenue contribution from the subsea project.
Alam Maritim expects the oil and gas industry to be vulnerable and volatile in the interim period, due to slower project rollouts and softening charter rates.
It said the business outlook for Alam Maritim group is influenced by the level of capital expenditure spending by the oil majors, which is in line with the volume of exploration and production activities.
“Despite these challenges, we believe that the sector should be able to withstand short term uncertainties and sustain with solid fundamentals in the long run.
Alam Maritim share price dropped one sen or 1.5% at 65.5 sen today, giving it a market capitalisation of RM614.77 million.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)[/size]