KUALA LUMPUR (May 15): Icon Offshore Bhd announced a net profit of RM20.36 million in the first quarter ended March 31, 2020 (1QFY20), compared with a net loss of RM7.64 million a year earlier.

The company’s net profit was mainly due to one-off gains from the debt restructuring exercise and higher revenue.

While exploration and production activities in the oil and gas (O&G) sector — which underpin offshore support vessel (OSV) demand — are expected to be volatile this year, Icon Offshore stated the meltdown on crude oil prices will have minimal impact on contracts that it has already secured.

It highlighted that a significant portion of its order book consists of long-term contracts with tenure of over a year that are expected to provide steady cash flow and better earnings visibility.

“With the completion of the corporate proposals that include fundraising of RM247.2 million as announced on Feb 18, 2020, the group is in a stronger position to overcome the challenges and tough operating conditions,” it said.

In the filing to Bursa Malaysia, Icon Offshore announced that it booked an RM19.1 million gain from its debt restructuring exercise and RM8.8 million over the waiver of interest payable upon completion of the restructuring exercise.

Quarterly revenue grew 17% at RM48.88 million against RM41.77 million in the previous corresponding quarter, thanks to higher utilisation of its vessels during the quarter under review.

However, its administration expenses went up by 21% to RM9.5 million in 1QFY20 from RM7.8 million a year ago as a result of the company’s mutual separation scheme to right-size its workforce.

“The focus of the group will be on operational efficiencies, securing new contracts and maximising its utilisation rate through competitive bidding for domestic and regional contracts as well as leveraging on its continued presence in Brunei,” it said.

Recall that Icon Offshore had undertaken a massive cash call with a 100-for-one rights issue on the basis of free warrants to raise RM250 million.

On top of that, it has also converted loans amounting to RM27.5 million into equities. 

Icon Offshore’s share price was up one sen at 7.5 sen, valuing it at RM198.12 million.