More impairments ahead for this O&G company

SINGAPORE (Nov 8): OCBC Investment Research is maintaining its “hold” rating on PACC Offshore Services Holdings with a fair value of 30 cents, in anticipation of further impairments going forward.

According to OCBC’s analyst Low Pei Han, the carrying value of the goodwill from POSH’s acquisition of PSA Marine’s offshore business in 2007 and the carrying value of POSH’s fleet of vessels are expected to be impaired, with the actual amount to be determined by year-end.

As it stands, POSH has US$168.3 million ($233.9 million) of goodwill in its books from the PSA acquisition, and fixed assets of US$1.33 billion. Back in 4QFY15, the group had already made an impairment of US$127 million on goodwill and a US$21.4 million impairment on fixed assets.

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