CH Offshore

CH Offshore: CH Offshore’s 3QFY15 net profit tanked 35.1% y/y to US$3.8m, on lower revenue of US$7.8m (-13.1%) as two vessels were scheduled for mandatory major overhaul.

Gross margin before direct depreciation slipped 1.2ppt to 82.9%.

Bottom line was dragged lower by admin expenses (US$1.3m, +47.9%) arising from higher advisory fees related to the cash offer by Falcon Energy and an on-going legal case, as well as reduced share of associates profits (US$0.5m, -49.9%), as four vessels were off-hired due to mandatory overhaul (1 vessel), repairs (2), and no charter (1).

Management is not sanguine about its outlook, citing a highly challenging environment amid low crude oil price, oversupply and low demand for offshore support vessels.

Given the healthy cash position of US$73.9m (32% of equity base) and no debt, the group is paying out a special DPS of 9¢ (US$47.5m), which translates to a generous dividend yield of 17.3%.

CH Offshore is currently trading at 9.2x trailing P/E and 1.2x P/B