Possibly the Worst Quarter on Zero DSV Utilisation
According to a research note released today from UOB Kay Hian, Singapore offshore vessel operator Pacific Radiance achieved an ominous vessel utilization of 0% for its diving support vessel fleet in the second quarter of 2015.
"OSV activities are recovering on more stable oil prices but E&P spending cuts are hampering a strong rebound. There is also 0 utilization for DSV segment in 2Q15," says the note.
Pacific Radiance is talking delivery of 6 vessels in 2H15 instead of 8, which is in response to the low tender activity for OSV vessels. The deferring of some vessel deliveries is part of their cost-reduction measures.
The note said that Pacific Radiance has delayed the delivery of two vessels scheduled for delivery in the second half of this year. The two vessels will be delayed until 2016, leaving the company with six more vessels to deliver this year.
UOB Kay Hian expects 2Q15 to be the worst quarter and cuts their 2015-17 net profit forecasts by 75%, 17% and 5% respectively. Given Pacific Radiance’s experienced management, low fleet cost and its positioning predominantly in shallow-water production, the house expects it to ride through the current stormy environment.
