PACC Offshore Services Holdings (POSH) reported a 42% YoY fall in revenue to US$34.3m and a net loss of US$18.4m in 1Q17, vs. net profit of US$4.5m in 1Q16. This compares to our net loss forecast of US$32.5m for FY17. There were insignificant one-off items in the quarter.

Most of the drop in revenue came from the offshore accommodation segment (-65% YoY to US$10m in 1Q17) as the SSAV POSH Xanadu completed its extended charter in Mar 2017 on reduced charter rate and two of the light construction vessels were not deployed in the quarter.

As of 1Q17, the group had four vessels which commenced charter with an oil major in the Middle East and the remaining eight vessels will be deployed progressively in the next three quarters of FY17.

Pending more details from management, we maintain our HOLD rating but put our fair value estimate of S$0.335 under review.

Source: OCBC Research - 5 May 2017