Renaissance hit by sharp profit decline

Earnings at Renaissance Services, an Omani oilfield-services company, shrank dramatically in the first nine months of this year, as the company is burdened with a backlog of unprofitable projects and low use of its vessels.

Profit before minority interests fell to 5.3 million Omani rials (Dh50.5m) from 20.8m rials a year earlier, in spite of a 10 per cent rise in revenue to 206m rials, according to a statement from the company.

Renaissance's engineering business recorded a loss of 5.1m rials, despite revenue remaining almost constant.

The subdued performance was because of high costs on several engineering projects, said Stephen Thomas, the chief executive.

"Some of the backlog that we are taking through to 2012 are in projects with little or no margin," he said yesterday.

The marine arm, the UAE-based Topaz Energy and Marine, failed to capitalise on a strong increase in revenue. Earnings rose by only 2m rials to 26.2m rials, in spite of revenue rising by more than 18m rials.

Topaz also suffered from low utilisation rates, as demand remained weak in the first half of the year, and vessels were taken out of service for maintenance in the third quarter.

The company expects vessel use to improve, however. "The overall utilisation trend is actually very good. We see green shoots on utilisation and on rates as well," said Mr Thomas.

The US$380m (Dh1.39 billion) refinancing by Topaz was progressing well, he added, with a deal expected to be completed by the middle of next month.

After pulling out of a listing at the London Stock Exchange this year, Topaz is undergoing a reorganisation in anticipation of future initial public offerings.

It will be structured into two distinct units, an offshore-support vessel and an oilfield-services division on the recommendation of investors. But no decision on dates for an IPO for either division had been taken, said Mr Thomas.

business@thenational.ae

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