Titan under pressure as boom runs out of gas
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.