CHAIRMAN’S
MESSAGE
In the light of this industry wide disaster,
the financial performance that we present
in these accounts, whilst not good, are very
credible. For instance, we achieved FY2015
revenue of S$184.2 million. Equally we made
a profit being a FY2015 net profit attributable
to shareholders of S$7.9 million.
We have been able to achieve this by
focusing on a few key strategies for the year.
This includes focusing on the more stable
and lower credit risk that is shiprepair and
conversion, emphasizing our strength and
investing in dredge engineering vessels
(we are providing a significant number of
vessels for the Megaport project) and working
towards maximizing shipcharter utilization.
Needless to say cost rationalization has also
gone to the top of our list.
A REVIEW OF BUSINESS
SEGMENTS
Shipbuilding
It has been a particularly tough year for our
shipbuilding business, primarily due to the
weak business cycle and the oversupply in
the global shipping market. Specifically, the
lower revenue for the shipbuilding segment
was due to a few reasons, 1) the percentage
of completion for our orderbook backlog has
resulted in lower revenue recognized for the
financial year, 2) the S$95 million reversal
on the shipbuilding revenue following the
rescission of the two OSV shipbuilding
contracts in December 2014, and 3) our
conscious decision not to take excess risk
in order taking. The sharp and prolonged
decline in oil prices, coupled with the lower
demand for bulk commodities and hence for
shipping have resulted in fewer shipbuilding
orders. While competition became fierce,
we decided not to quote at a loss, or take on
significant additional risk just to secure new
build orders.
Nonetheless, there has been some
encouraging progress. During FY2015,
we secured new shipbuilding contracts
worth approximately S$140 million for the
construction of a series of tugs and barges.
These vessels will be specially designed
and built for overseas customers engaged
in the mining and marine infrastructure
industries. As of June 30, 2015, the Group
has an outstanding shipbuilding order book
from external customers of approximately
S$356 million for 20 vessels, comprising
AHTS, tug, barge, Seismic Support
Vessel and tanker. These vessels will be
progressively delivered to the customers up
to the first quarter of FY2018.
Currently, we have 4 units of AHTS in our
Build-to-Stock (BTS) program. These 4 AHTS
are being constructed in our shipyards in
Batam and China and are expected to be
completed between March and October
2016. We are actively looking for buyer and
chaterer for these 4 vessels. In view of the
weak demand for OSV, we will not continue
with the BTS program until the market
improved in future.
Shiprepair and Conversion
Shiprepair and Conversion segment has
performed in line with our expectation,
given the depressed global shipping market.
There were fewer high-value jobs during
the year; however, owing to the demand for
mandatory repair and docking of vessels, our
extensive shipyard facilities and resources,
our excellent track record in work execution
and delivery, and the stable client network,
we delivered stable revenue with improved
profit margin. The low oil price has impacted
our order intake of oil rigs and OSVs. More
OSVs are being “cold stacked” and we
expect the hit rate for tender for repair and
conversion of OSV to be low in the next
financial year.
ASL Marine Holdings Ltd. /Annual Report 2015
16
