This article first appeared in The Edge Financial Daily, on May 18, 2016.

KUALA LUMPUR: Things are looking up for offshore service vessel player Icon Offshore Bhd with the recovery in oil prices, said managing director Amir Hamzah Azizan.

“We think as we move forward there is light at the end of the tunnel. As the oil price stabilises, there will be a few more activities coming in the market which will help us,” said Amir.

“When we walk to the beginning of this year we saw an oil price below US$30, and of late we see [that the] Brent is at least above US$48. The supply and demand has begun to change,” he told reporters after the annual general meeting yesterday.

Amir, however, said there would be a lag between the recovery in oil price and the release of activities by oil majors.

Meanwhile, Amir said the initiatives taken by the company to restructure its capital and operating cost, and driving fleet utilisation through competitive bidding has already shown positive signs.

He said Icon aimed at maintaining its 60% utilisation rate for its vessels and will be aggressively tendering for new projects, especially in Brunei.

As at March 31, Icon had an order book of RM640.1 million.

Amir said the current down cycle offers opportunities to explore transformational activities, including mergers and acquisitions, joint ventures, regional expansion and diversification.

The company is studying the opportunities but nothing is in the pipeline as yet, he said.

Icon, he said, will carefully consider such proposals, including calls for consolidation, taking into consideration the size and strength of its balance sheet.

Amir said there will be deferral of RM90 million in capital expenditure (capex) through the deferral of four vessels delivery.

“The capex we have to spend [this year] was about RM90 million. We pushed that one back … By deferring it, I can time the arrival better to fit the market condition,” he pointed out.

On whether Icon will see more impairment for the current financial year, Amir said the board has yet to make any decision. But with the recovery in the oil prices, he hopes there will not be any impairment.

For the financial year ended Dec 31, 2015 (FY15), Icon posted a net loss of RM364.09 million, against a net profit of RM59.35 million in FY14, which Amir said was due to impairment of goodwill and impairment of assets.

Impairment of goodwill amounted to RM180.6 million and the impairment of property, plant and equipment such as vessels amounted to RM195.4 million.

Shares in Icon Offshore closed unchanged yesterday at 37.5 sen, with 1.13 million shares done, with a market capitalisation of RM441.44 million. The counter has been on a downward trend since its listing in June 2014, and now down to about 20% of its initial public offering price of RM1.85.