The Dubai-based oilfield services company Topaz Energy and Marine said its net profit fell 88 per cent in the first quarter as its clients cut spending because of a drop in oil prices and challenges in Africa.
The company’s net profit came in at US$1.1 million compared with $9.2m in the same period a year ago. Revenue for the period was $85.2m, down 4.7 per cent from $89.4m in the same period last year.
On a geographic basis, revenue from the Mena region fell 12.4 per cent, and 10.6 per cent in Africa. It did, however, rise 3.9 per cent in the Caspian region.
The company, which operates a fleet of more than 95 offshore support vessels, said its income tax expense jumped 27 per cent year-on-year in the first quarter, while finance costs rose 8.4 per cent in the same period.
Despite the challenging circumstances, Topaz, an arm of Oman’s Renaissance Services, said it was taking measures to turn the company’s operations around.
“Although the market was challenging during the quarter as our clients responded to a lower oil price, we are already beginning to see an increase in client activity across our regions,” said René Kofod-Olsen, the chief executive of Topaz Energy and Marine.
“As the market adjusts, we have been prudent – conserving cash, postponing non-essential fleet upgrades and refinancing a proportion of our debt on enhanced terms while controlling costs across the business.”
Topaz said that its main focus would be winning long-term contracts and expanding into new growth markets.
“We are now fully registered in our key African markets of Nigeria and Angola, which means we are able to pursue medium- to long-term contracts rather than the spot business, to which we have been restricted to date,” said Mr Kofod-Olsen.
However, the company’s short-term operations in Africa will be under pressure until it develops its fleet.
Mr Kofod-Olsen said his company’s diversified portfolio was likely to offset short-term market pressure.
“We are confident that our strategy and operational excellence will help to deliver a robust performance for 2015,” he said.
Topaz last month secured a loan of $550m to help refinance its debt and invest in new projects.
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