The Courier-Mail

Ti­tan un­der pres­sure as boom runs out of gas

- LIAM WALSH

TI­TAN Energy Ser­vices, the Bris­bane-based ser­vice op­er­a­tor which rock­eted in the gas boom, has posted a $50 mil­lion loss as the sec­tor soured.

Even its main di­vi­sion that caters and house­cleans worker-camps cur­rently has no con­tracts, ac­cord­ing to ac­counts re­leased on Fri­day.

Au­di­tors also flagged con­cern about Ti­tan con­tin­u­ing as a go­ing con­cern.

But the flip side was Ti­tan out­lin­ing a growth plan by di­ver­si­fy­ing into new mar­kets and geogra­phies. It’s also try­ing to be­come a one-shop con­trac­tor for clients, say­ing that’s what cus­tomers want in­stead of a bunch of sub­con­trac­tors.

“The di­rec­tors have a rea­son­able ex­pec­ta­tion that the group … will have ad­e­quate re­sources to con­tinue in op­er­a­tional ex­is­tence,” the ac­counts said.

The com­pany also noted ten­der ac­tiv­ity had “in­creased sig­nif­i­cantly in re­cent months”. Com­pe­ti­tion re­mained high with mar­gins un­der pres­sure, Ti­tan said.

Af­ter a $12.2 mil­lion profit in 2014, the com­pany posted a loss of $50.56m this year.

Ti­tan of­fered camp ac­com­mo­da­tion and drilling to the com­modi­ties sec­tor. Its shares peaked at $3.22 in Oc­to­ber 2013 but closed at 5.3 on Fri­day.

But its plunge as the sec­tor slowed echoes tough times for oth­ers with ex­po­sure to mines or oil as prices dropped. Ausenco is among engi­neers who saw prof­its hurt, while trans­port out­fit Heavy Haulage Aus­tralia’s col­lapse was partly linked to its ties to the sec­tor.

Ti­tan’s $50.6 mil­lion loss in­cluded $27.4 mil­lion in im­pair­ments on its ac­com­mo­da­tion and drilling arms. Ti­tan said its “un­der­ly­ing” loss, strip­ping out fac­tors such as the im­pair­ments, was $9.1 mil­lion. Rev­enues more than halved from $87.7 mil­lion to $43 mil­lion.

Pos­i­tive events in­cluded Ti­tan man­ag­ing to sell off an oil­field ser­vices di­vi­sion and pay off its se­nior len­der, GE Com­mer­cial. It’s even ex­pect­ing a tax re­fund of $2.2 mil­lion.

Ti­tan was look­ing at op­tions for re­fi­nanc­ing.

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