Ezra profit up 26% to $54.5mln

Diversified earnings stream fueled revenue as it rose 4% to US$244.3mln, largely from Marine Services Division.

Ezra Holdings Limited (Ezra), an integrated support and marine services provider in the offshore oil & gas (O&G) sector, posted a 26% higher year-on-year (yoy) net attributable profit (PATMI) of US$54.5 million for the nine months ended 31 May 2010 (9MFY10), supported by its diversified earnings base.

Group revenue rose by 4% yoy to US$244.3m, largely from the Marine Services Division which benefited from an increase in procurement and equipment supply and engineering activities in Vietnam. This fabrication and engineering services base recently clinched two contracts worth up to US$130.0 million, one of which is to build an offshore accommodation structure for use in the fast expanding African offshore O&G market, according to an Ezra announcement.

Ezra's Managing Director, Mr Lionel Lee, said: “The results reflect the success of our efforts to diversify Ezra's earnings stream since our public listing in 2003. Then, we were very dependent on charter income from the offshore support services business.

“Today, we have a strong fabrication services capability in the Marine Services Division and are in the process of building our expertise under the Deepwater Subsea Services Division. The latter is expected to drive our next lap of growth, and as one of the first few players to move into deepwater support services work, we want to be able to participate in the numerous subsea installation projects we see coming up in the medium term.”

The Group continued to closely monitor the working capital requirements of its three core business units and generated a net cash of US$12.7 million from operating activities in 9MFY10 against a net cash outflow of US$42.3 million in the previous corresponding period.

Ezra's balance sheet remained healthy despite asset acquisitions and geographic expansion in recent months to fuel future growth.

This year, Ezra added Lewek Merlin and Lewek Aries to its fleet, bringing the total number of vessels under its management and operation to 33. Its first Multi-Functional Support Vessel and a deepwater subsea construction vessel are expected to join the fleet shortly. The Group, also invested RM64.0 million for a 19.9% stake in Perisai Petroleum Teknologi Bhd (listed on the Bursa Malaysia Securities Berhad) to position itself for the Malaysian offshore O&G market.

Commenting on what to expect from Ezra in the coming months, Mr Lee said: “We are positive on prospects in the offshore O&G sector and will continue to grow and strengthen the Group's global presence as well as beef up our core capabilities, especially in the deepwater segment. We are also busy scouting for good assets to buy at 'distressed' prices to build up Ezra's lead in the deepwater offshore O&G support services sector.”

Since 2009, the Group has acquired various assets in line with its strategy to expand its deepwater subsea services offering. Last September, Ezra ordered five new Remotely Operated Vehicles which can perform precise difficult tasks in ultra deep waters. A month later, the Group announced the prized purchase of the shipset for ice-class vessel from the Ice Maiden project at 'distressed' prices which will enable Ezra to operate underharsh and demanding conditions in glacier-filled areas such as the Arctic region.