PACC Offshore Services Holdings (POSH) reported a 48% YoY drop in revenue to US$41.6m and a net loss of S$13.0m in 3Q16, bringing 9M16 net loss to US$26.1m vs. our full year estimate of US$18.5m net loss and the street’s estimate of a US$3.8m net loss.

Market conditions continued to deteriorate and gross loss of the OSV division continued to grow QoQ, while the T&I and offshore accom segments also reported poorer performances on a sequential basis.

Looking ahead, the carrying value of the goodwill arising from the acquisition of PSA Marine’s offshore business in 2007 and the carrying value of POSH’s fleet of vessels will be impaired; this amount will be determined at year end.

We put both our hold rating and fair value estimate of S$0.29 under review, pending more details from management.

Source: OCBC Research - 7 Nov 2016