Kim Heng hit with $1m loss in Q4 on back of oil rout

Gross profit margin slipped 14 percentage points.

Kim Heng Offshore & Marine reported a $1m loss in the fourth quarter, coupled with a 21% year-on-year fall in revenue to $20.5m.

This was mainly due to a 7-percentage point drop in its gross profit margin, which slipped to 30% from 44% a year earlier, as well as S$3.3m provisions for doubtful debt in relation to trade receivables.

According to OCBC, core net profit is estimated to be $1.9m in the quarter excluding such one-off items, such that full year core PATMI of S$8.1m accounted for close to 70% of its estimate.

“With the oil price rout, rig utilization in Asia is on a downward trend, resulting in a decrease in demand for rig maintenance and related services,” stated OCBC.