Profit at Topaz Energy and Marine dropped by 63 per cent last year, as it suffered from the oil price-driven industry slump.
The Dubai-headquartered shipping company, which is a wholly owned subsidiary of Muscat-listed Renaissance Services, Tuesday (Mar 22) reported a drop of more than 10 per cent in revenues last year to US$362.5 million, from $404m the previous year, while net profit before exceptional items fell by 63 per cent to $21m.
Cable layer Topaz Installer Image: Topaz
The decline in activity in Topaz’s nascent offshore African business – primarily Nigeria and Angola – and pressure on ship rates in the Arabian Gulf and other Middle East markets more than offset a steadier performance for the company’s largest business segment in the Caspian Sea, where it has a number of contracts to supply ships and rigs to BP, said the Topaz chief executive, René Kofod-Olsen.
The company took a further hit from exceptional items, mainly a $71m “impairment charge" required by accounting rules to reflect the loss of value of its ships because their earning ability has been affected by the oil industry slump.
Together with a one-off charge of $8.3m to refinance some debt, the exceptional items meant that Topaz booked a loss last year of $58.5m, compared to a profit the previous year of $52m.
It is likely to take some time for conditions to improve. “We expect the first half of 2016 to be a challenging period," Mr Kofod-Olsen said.
“As we head into 2016, we are likely to continue to see rate pressure as clients are impacted by the lower oil price environment, particularly in the Africa and Mena regions, where we are currently awaiting some tender decisions."
Brighter news came from the Caspian, which accounts for 63 per cent of revenue. The company reported that vessel utilisation was at 96 per cent, higher than previous year’s 94 per cent, and that new long-term contracts were signed with BP.
Source: The National