Vessel builder Triyards Holdings loses $86 million in Q3
Singapore-listed Triyards Holdings, a vessel builder for the beleaguered oil and gas industry, has plunged to a US$63.3 million (S$86 million) loss in its third quarter.
The bottom line for the period ended May 31 was a reversal from a net profit of US$4.1 million in the same period last year.
The counter sank 6.9 per cent, or 1.1 cents, to close at 14.9 cents after releasing the results in the early hours of yesterday.
Third-quarter revenue fell 62 per cent to US$30.9 million, the firm said in a filing with the Singapore Exchange yesterday. The biggest hit came from a US$45.1 million allowance for the impairment of assets.
"The prolonged depressed state of the marine and oil and gas industries, coupled with the fiercely competitive market environment, has negatively impacted the carrying value of assets across the industry," said Triyards chief executive Chan Eng Yew.
It also allowed for US$8.3 million in doubtful receivables from entities of its parent Ezra Holdings. These entities either face a potential going-concern issue or have filed for Chapter 11 bankruptcy in the United States.
Triyards said it anticipates that certain financial covenants of certain loan agreements would be in breach by the end of its 2017 financial year.
"The group will engage with the relevant banks for further action as it would be required by the banks," it said.
The next 12 months "will be extremely challenging", with the business environment resulting in margin compression and difficulty in gaining access to new sources of liquidity.
"In view of the above, the group has undertaken an exercise to rationalise and reassess the carrying value of certain assets of the group. These assets were acquired or developed by the group previously with plans and intentions to deploy for new projects or business ventures." - THE STRAITS TIMES
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