Icon Offshore CEO opts out of reelection, Q1 net profit plunges

KUALA LUMPUR: Icon Offshore Bhd, which saw its net profit for the first quarter ended March 31, 2015 plunge 86% on lower profit margins and higher administrative expenses, CEO Dr Jamal Yusof did not seek re-election as a director at the company's AGM yesterday.
Icon Offshore made a net profit of RM2.7 million for the financial period ended March 2015 compared to RM19.5 million net profit for the same period in 2014.
This was on 20% lower revenue at RM63.6 million compared to RM80.1 million for the same financial period in 2014.
Its chairman Raja Tan Sri Arshad Uda said the company received a letter from Jamal yesterday morning indicating his intention to withdraw his offer to be re-elected as a director, in order to assist with Malaysian Anti-Corruption Commission (MACC) investigations.
Jamal has been on leave of absence since April 27, 2015 and will remain so for a period of six months. His brother Rahman Yusof, COO of Icon Offshore, is also on leave of absence for the same period.
"In his letter to the board, he said that he will in due course, discuss with the board on the future leadership of the company going forward. Based on his actions today, we are confident he will continue to put the best interest of the company ahead of his personal interest," Arshad told reporters at its AGM yesterday.
According to Arshad, the company does not have any new updates on the investigation and have not been notified on the nature of the investigation. Jamal and Rahman were remanded by MACC for three days last month.
Non-independent non-executive director Datuk Abdul Rahman Ahmad declined to reveal the tenure of Jamal's contract but stated that CEOs under Ekuiti Nasional Bhd's (Ekuinas) portfolio of companies typically have three-year contracts.
Arshad, who is also Ekuinas chairman, reiterated Ekuinas' support for Icon Offshore but declined to comment on whether it has plans to increase its stake in the latter from the current 42.3%.
"As far as Icon's business is concerned, it is in the very capable hands of Captain Hassan Ali (deputy CEO). He and his team have done whatever is necessary to assure the clients and the shareholders that it is business as usual," said Arshad.
The company has an orderbook of RM760 million worth of long term contracts, of which more than half will last until 2016.
In terms of new markets, Arshad said it is looking at Myanmar and the Middle East and is aware of the opportunities there. He did not elaborate further except to say that the company will weigh the cost benefits before making any decisions.
According to Hassan, there is still demand for offshore support vessels (OSVs) and the company is looking at pricing and fuel consumption in order to be more competitive.
He said it is also looking at price mechanism in order to increase its utilisation rate, which is currently at about 78%.
"We hope to maintain target (utilisation rate) as per last year but bear in mind the current market is not so good," he added.
The company will also continue with its renewal and rejuvenation programme by disposing of older vessels and those with lower specifications. Last year, the company disposed of two vessels.
This year the company has five vessels coming in, with the remaining four to be delivered in the first quarter of 2017.
Meanwhile, in a stock exchange filing yesterday, Icon Offshore said it has secured RM99 million two year charter contract started from April 10, 2015.
Under the time charter contract, Icon Offshore will provide offshore support vessel including the provision of time charter of the accommodation workboat and crew to Icon Valiant with Zell, a company based in Brunei.