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Unaudited Financial Statements For the Second Quarter and Half Year Ended 30 September 2017

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Income Statement

Balance Sheet

Review of Group Performance

Consolidated Statement of Profit or Loss and Other Comprehensive Income

(a) Revenue, costs of sales and gross profit

The Group registered revenue of approximately US$41.23 million for the three (3) months ended 30 September 2017 ("2Q2017/18"), representing a decrease of 24.8% or US$13.57 million when compared to the three (3) months ended 30 September 2016 ("2Q2016/17"). Group revenue also declined by 30.4% or approximately US$36.01 million to US$82.45 million for the half year ended 30 September 2017 ("HY2017/18") as compared to revenue of US$118.45 million recorded for the half year ended 30 September 2016 ("HY2016/17"). These changes were due mainly to the completion of various one-time vessel management projects in in the second half of 2016 which were partially offset by the commencement of new contracts with a key customer since 1Q2017/18.

The Group's core chartering & brokerage services accounted for 90% of Group revenue in 2Q2017/18 compared to 68% in 2Q2016/17. For HY2017/18, the chartering and brokerage services contributed 92% to the Group versus 76% in HY2016. While the Group experienced lower utilisation for certain vessels, this was mitigated by the ongoing long-term charters in the Middle East as well as the commencement of new contracts with a key customer in the Middle East since 1Q2017/18. As such, revenue derived from the chartering and brokerage services remained steady at US$37.10 million in 2Q2017/18 compared to US$37.26 million in 2Q2016/17, while chartering and brokerage revenue for HY2017/18 soften to US$75.85 million from US$90.03 million in HY2016/17.

Cost of sales for 2Q2017/18 and HY2017/18 declined 27.6% and 32.0% to US$31.08 million and US$61.62 million when compared to 2Q2016/17 and HY2016/17 respectively. The Group recorded an increase in gross profit margin to 24.6% in 2Q2017/18 compared to 21.7% in 2Q2016/17. For HY2017/18, gross profit margin also improved to 25.3% from 23.5% in HY2016/17. The expansion in gross profit margin was attributed mainly to lower depreciation expenses, as well as the Group's strategy to focus on its chartering and brokerage services business and reduce the revenue contribution from vessel management services which have historically commanded lower gross profit margin.

(b) Other income

Other income of US$1.77 million in 2Q2017/18 and US$2.54 million in HY2017/18 consisted mainly of insurance claim of approximately US$0.65 million, sale of scrap of US$0.63 million, foreign exchange gain of US$0.35 million and other individually immaterial miscellaneous income.

(c) Administrative expenses

Administrative expenses, which comprise largely staff and travel related expenses, decreased 15.1% or US$0.56 million year-on-year to US$3.16 million in 2Q2017/18. For HY2017/18, administrative expenses also decreased 24.8% or US$2.10 million to US$6.37 million in HY2017/18 from US$8.47 million in HY2016/17. These reductions were the result of the on-going measures implemented by the Group to optimise its cost structure.

(d) Finance costs

Finance costs decreased 27.2% or US$1.35 million to US$3.61 million in 2Q2017/18 from US$4.95 million in 2Q2016/17. For HY2017/18, the Group incurred finance costs of US$6.61 million, a decrease of 38.2% compared to US$10.69 million in HY2016/17. The decline in finance costs was due mainly to the full redemption of Notes Payables – Series 1 of S$100.0 million on 1 April 2016 and Series 2 of S$60.0 million on 22 November 2016. This was partially offset by higher interest expenses arising from new term loans that were taken up for the acquisition of vessels during the second half of the last financial year.

(e) Operating profit from ordinary activities before share of results of associate and joint ventures

The Group recorded operating profit from ordinary activities before share of results of associate and joint ventures of US$5.22 million in 2Q2017/18, an increase of 32.9% compared to US$3.93 million in 2Q2016/17. The improvement was attributed mainly to higher other income as well as reductions in administrative and finance costs. For HY2017/18, operating profit amounted to U$10.16 million, an increase of 11.1% from US$9.15 million recorded for HY2016/17.

(f) Share of results of associate and joint ventures

The Group recorded its share of results from associate and joint ventures of US$123,000 for 2Q2017/18 compared to a loss of US$771,000 in 2Q2016/17. For HY2017/18, the Group's share of results from associate and joint ventures was US$127,000 as compared to US$49,000 in HY2016/17.

(g) Net profit

The Group's net profit for 2Q2017/18 and HY2017/18 increased by 73.9% and 42.1% to US$5.29 million and US$10.00 million, compared to US$3.04 million and US$7.04 million in 2Q2016/17 and HY2016/17 respectively. This was driven by higher operating profits as well as the absence of an impairment charge of US$1.62 million that was recorded in 1Q2016/17.

Based on the weighted average number of shares, the Group recorded earnings per share of 0.12 US cents and 0.22 US cents for 2Q2017/18 and HY2017/18 respectively.

Statements of Financial Position

(h) Trade and other receivables

Trade and other receivables increased from US$216.81 million as at 31 March 2017 to US$263.20 million as at 30 September 2017. This was due mainly to an advance made to a joint venture amounting to US$28.42 million, and prepayments made to certain vendors during HY2017/18.

(i) Available-for-sale investments

As at 30 September 2017, there has been no redemption by the issuer of the unquoted preference shares. Accordingly, the balance remained the same when compared to 31 March 2017. The classification under current asset since 31 March 2017 represents the management's intention to dispose these preference shares when appropriate.

(j) Property, plant and equipment

Property, plant and equipment decreased from US$372.23 million as at 31 March 2017 to US$367.90 million as at 30 September 2017 mainly due to depreciation expenses, which is offset by replacement capital expenditure incurred by the Group for the half year ended 30 September 2017.

(k) Joint ventures

The change of approximately US$127,000 in the carrying value of the joint ventures as at 30 September 2017 as compared to 31 March 2017 is attributed to the recognition of the Group's share of results of the joint ventures for HY2017/18.

(l) Associate

As at 31 March 2017, the Group fully impaired the carrying amount of its investment in associate to US$Nil.

(m) Total current and non-current borrowings

Total current and non-current borrowings for the Group include term loans, working lines and finance lease.

Total current and non-current term borrowings, which comprised largely of bank borrowings for vessels, reduced from US$340.82 million as at 31 March 2017 to US$335.99 million as at 30 September 2017. This is mainly due to repayments of loan principals made during the current financial period.

(n) Trade and other payables

The Group's trade and other payables decreased by approximately US$2.07 million from US$199.41 million as at 31 March 2017 to US$197.34 million as at 30 September 2017. The marginal decrease resulted from payments made to vendors during 2Q2017/18.

Consolidated Statement of Cash Flows

Cash and cash equivalents decreased by US$35.08 million from US$45.57 million as at 31 March 2017 to US$10.49 million as at 30 September 2017.

(o) Cash flow from operating activities

The Group generated net cash from operating activities of US$10.37 million and US$6.92 million for 2Q2017/18 and HY2017/18.

(p) Cash flow from investing activities

Net cash used in investing activities of US$2.39 million and US$2.15 million in 2Q2017/18 and HY2017/18 arose mainly from purchases of property, plant and equipment in the current financial period.

(q) Cash flow used in financing activities

Net cash used in financing activities in 2Q2017/18 and HY2017/18 amounted to US$5.80 million and US$39.86 million respectively. The significant cash outflow in HY2017/18 was attributed to an advance to a joint venture of US$28.42 million and the repayment of loan principal and interest of approximately US$6.61 million.

Commentary

The market environment for the global offshore support vessel ("OSV") sector is expected to remain challenging over the near term. While the global oil market has shown encouraging signs of stability and recovery in recent months, the OSV industry is still facing a situation of excess supply against a backdrop of slower demand. The resultant intense competitive industry conditions will continue to exert pressure on vessel utilisation rates and charter rates.

In 2Q2017/18, the Group's operating profit from ordinary activities increased 69.3% to US$5.34 million compared to the same quarter in the last financial year. This was the Group's fourth consecutive quarter of higher operating profit since 2Q2016/17 which can be attributed to existing long-term vessel charters and commencement of new vessel charter contracts in the Middle East, as well as initiatives undertaken to align its operating and cost structure to prevailing market conditions.

The Group's core vessel chartering business is driven mainly by its long-term charter contracts secured in the Middle East region. The resilience of its business model has enabled the Group to endure the prolonged downturn in the oil and gas industry and continue delivering operating profits. The Group maintains a robust chartering services order book with total value of approximately US$950 million as at 30 September 2017. This order book comprises mainly long term charter contracts that stretch up to 2025, including 2-year extension options.

Following the series of cost rationalisation, operations streamlining and restructuring activities, as well as an asset write-down exercise undertaken in the last financial year, the Group believes it is better positioned to overcome current market challenges, seize new business opportunities and execute its growth strategy.

In partnership with its strategic shareholder and partner, Rawabi Holding Company Limited, the Group will continue to build on its strengths to solidify existing customer relationships and increase penetration in target markets in the Middle East and other regions.

The Group has a superior market position in the Middle East as it ranks as one of the largest OSV players in that region. The Group will work closely with a key National Oil Company customer who continues to actively invest in offshore oil and gas production. The Group has also made headway in its strategy to penetrate new target markets with the award of new vessel charter contracts in Egypt and Turkmenistan in May 2017.

As part its ongoing strategies, the Group will continue to raise its operational capabilities and service quality, while expanding and differentiating its fleet as appropriate to meet customers' requirements. The Group will also focus on ensuring cost and operational efficiencies.