Singapore's offshore support vessel company Vallianz Holdings said on Monday net profit for the third quarter fell 84.9 percent to US$693,000 from US$4.6 million a year ago.
Vallianz, which provides offshore support vessels and integrated marinesolutions to the oil and gas industry, said lower contributions from vessel management services mainly accounted for the poor quarter.
Losses by PT Vallianz Offshore Maritim, the group's 49 percent-owned associate in Indonesia, also impacted the results. Vallianz said it grappled with slower demand for offshore support vessels and intense industry competition in regions other than the Middle East .
To buffer the impact on its profitability and adapt to the current market environment, the Group has been focusing on optimising its cost structure it said.
The Singapore-headquartered company said business conditions in the global offshore oil and gas industry are likely to remain depressed. The group said it has been able to substantially reduce its aggregate administrative expenses and finance costs in the third quarter.
"Notwithstanding the difficult business environment, the Group has consistently generated profits for three consecutive quarters this year. To sustain the Group's competitiveness and cement its market position as a leading offshore support vessel provider to one of the largest national oil companies in the Middle East, we will continue to focus on strengthening our core capabilities to deliver operational excellence and value to our customers," CEO Ling Yong Wah said.
The offshore and marine industry in Singapore is facing a crisis as companies have cut spending to manage the fall in oil prices. Earnings at marine services companies like Sembcorp Marine and Keppel Corp, as well the shipbuilding and offshore support companies, have been hit by the industry downturn.
Last month, EMAS Offshore reported a full-year loss of $265.3 million (S$137.2 million), adding that the net loss for the three months ended 31 August 2016 stood at $98.5 million.
Offshore services companies like Swiber and Sembcorp Marine have also faced headwinds after the continued global oil market downturn pulled back investments in the sector.