SINGAPORE (Sept 11): NauticAWT, the provider of subsea and surface engineering services to the oil and gas industry, swung to a loss after tax of US$2.3 million ($3.2 million) for the half year ended June. A year ago, it regsitered earnings of US$1.7 million a year ago.

Revenue increased 56.7% to US$13.9 million from a year ago, lifted by revenue contribution of US$6.9 million by the group of subsidiaries under AWT International that the company acquired in Nov 2014.

However, gross profit margin decreased to 27.3% from 49.4% due to margin dilution caused by the new group of subsidiaries which registered a profit margin of just 8.7%.

Historically, the acquired subsidiaries had provided consulting services in the subsurface and wells business segment which carries lower profit margin compared to other business activities of the group, says NauticAWT.

The group's administrative expenses also increased significantly to US$6.1 million due to administrative expenses incurred by the acquisitions as well as one-off IPO expenses.

NauticAWT expects its business outlook to remain very challenging.

“Since the listing of the Company in July 2015, there had been unexpected and rapid deterioration in the business prospects for the oil and gas industry, with many oil majors and operators undertaken extensive restructuring with numerous activities deferred. This has affected the Group, particularly the Acquired Group which specialises in the Subsurface and Wells business segment,” it adds.

NauticAWT last closed at 22 cents.