CH Offshore

CH Offshore: 2QFY15 net profit fell 19% y/y to US$5.4m, while revenue fell 4.2% to US$8.8m, as one vessel was off-hired due to its mandatory overhaul in between September and November. Gross margins rose 4.2ppt to 85.8% on lower operating costs. That said, bottom line slipped at a faster pace than topline, on increased admin expenses (US$1.2m, +27.7%), driven by increased legal and professional fees of US$0.3m, and lower share of associate’s profits (US$1m, -47.9%) as two vessels were off-hired. On outlook, management expects utilization rate to be stable, but the challenging OSV market, weighed by lower oil prices would continue to put downward pressure on charter rates. CH Offshore is trading at 11.7x annualized 1HFY15 P/E.