Bloomberg News

Ezra Says Subsea Business May Return to Profit on Oil Demand

November 23, 2011

Nov. 22 (Bloomberg) -- Ezra Holdings Ltd., a provider of offshore logistics to the oil and gas industry, said its deep- water subsea business may return to a profit next year as rising energy demand spurs exploration.

“Demand for our services remain extremely strong despite the European slowdown,” Lionel Lee, Ezra’s managing director, said in an interview in Singapore on Nov. 18. “I don’t see even in the next three to five years a slowdown in our activities.”

Ezra is bidding for subsea projects worth more than $6 billion globally, including $2 billion of contracts in the Asia- Pacific region, it said last month. The subsea division, which accounts for a third of Ezra’s revenue, posted an operating loss of $18 million last fiscal year because of costs stemming from the purchase of Aker Marine Contractors.

Order backlog for the business was about $745 million as of October, including a contract from BP Exploration & Production Inc. in the Gulf of Mexico, according to the company.

Ezra fell 5 percent to 86 Singapore cents on the island- city’s stock exchange yesterday. The stock has dropped 52 percent this year, compared with a 15 percent decline in the Straits Times Index.

Sales at the subsea business jumped more than eightfold to $179.5 million in the year ended Aug. 31, accounting for 32 percent of the company’s revenue of $559.1 million. Ezra’s overall net income dropped 47 percent to $40.4 million.

In October last year, the company agreed to buy 100 percent of Aker Marine Contractors for $250 million from Aker Oilfield Services AS. Ezra competes against Technip SA, Saipem SpA, and Subsea 7 SA to offer services such as equipment installation around oil fields on the seabed.

Ezra also offers offshore support services with its fleet of anchor-handling and platform support vessels, besides providing floating production and storage units as well as shipbuilding.

--Editors: Vipin V. Nair, Suresh Seshadri.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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