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1st Quarter 2019 ("Q1 FY19") vs 1st Quarter 2018 ("Q1 FY18")
The Group registered revenue of US$61.8 million in Q1 FY19, a 12% decrease from US$70.6 million in Q1 FY18. Higher revenue in the OSV, T&I and HSER segments were offset by lower contributions from OA.
Revenue increased 12% to US$24.3 million (Q1 FY18: US$21.7 million) on improved vessel utilisation of 70% in 1Q FY2019 (Q1 FY18: 68%). Due to higher operating expenses, the segment recorded a gross loss of US$0.3 million in Q1 FY19, comparable to Q1 FY18.
Revenue decreased 39% to US$23.8 million (Q1 FY18: US$38.9 million), largely due to POSH Arcadia – one of the Group's two Semi-submersible Accommodation Vessels ("SSAV") – being undeployed in the quarter. Correspondingly, gross profit declined 47% to US$5.0 million (Q1 FY2018: US$9.3 million). The segment's performance was mitigated by contribution from SSAV POSH Xanadu, which started a charter with Petrobras in January 2019. In addition, all four Light Construction Vessels ("LCVs") and three MultiPurpose Support Vessels ("MPSVs") were deployed during the quarter.
Revenue increased 49% to US$7.5 million (Q1 FY18: US$5.0 million) due to higher vessel utilisation of 58% (Q1 FY18: 53%) which includes deployment for the subsea sector. As a result, the segment registered higher gross profit of US$1.0 million in Q1 FY19 compared to US$0.4 million in the previous corresponding quarter.
HSER recorded a 26% increase in revenue to US$6.2 million (Q1 FY18: US$4.9 million), mainly due to an increase in the number of overseas charters. Correspondingly, gross profit grew by 164% to US$1.1 million (Q1 FY18: US$0.4 million).
General & Administrative expenses and Other Income
General and administrative expenses increased by US$3.0 million or 40% to US$10.7 million (Q1 FY18: US$7.7 million) mainly due to increased legal fees, personnel and other administrative expenses in Q1 FY19.
Finance costs increased by 14% to US$7.7 million (Q1 FY18: US$6.8 million) due to higher interest rates in Q1 FY19.
The Group's share of results from joint ventures ("JVs") was a loss of US$1.6 million in Q1 FY19 as compared to a profit of US$0.6 million in Q1 FY18. This was mainly due to lower vessel utilisation of our JV, POSH Terasea.
The Group recorded a net loss attributable to equity holders of the Company of US$12.7 million in Q1 FY19 as compared to US$7.2 million in Q1 FY18.
Statement of Financial Position
The Group's net asset was US$347.1 million as at 31 March 2019.
The Group has net current liabilities of US$218.5 million mainly due to bank borrowings due within one year.
Statement of Cash Flows
The Group generated net cash from operations of US$5.7 million in Q1 FY19 as compared to US$12.2 million in Q1 FY18. This was mainly due to higher losses in Q1 FY19.
Net cash used in investing activities of US$6.4 million in Q1 FY19 (Q1 FY18: US$5.7 million) was mainly due to acquisition of equipment in the subsea business.
For the OA division, POSH Xanadu commenced its charter with Petrobras in offshore Brazil in January 2019. The charter will last for eight months, with option for an eight-month extension. The Group is also actively seeking opportunities for POSH Arcadia. Aside from the two SSAVs, all monohull vessels in the OA fleet were deployed in Q1 FY2019, with improved charter rates. We expect sustained improvement for utilisation and charter rates for the OA monohull segment for the rest of FY2019.
The Group saw sustained growth momentum for its new business segments. POSH Subsea clinched its second contract in Q1 FY19 to support a pipeline replacement project off the coast of India. In the renewables sector, POSH Kerry Renewables added to its orderbook several contracts to support offshore survey and preparatory works for windfarm construction in Taiwan.
Moving forward, we expect charter rates and utilization to improve slightly for the OSV segment as offshore projects that were sanctioned in previous years materialize. The 13 vessels under long-term charters to a National Oil Company in the Middle East continue to deliver under the charters. The Group also re-purposed two OSVs for walk-to-work and subsea support operations, as part of its ongoing strategy to re-profile assets to serve growth segments.