CHAIRMAN’S MESSAGE
A REVIEW OF BUSINESS SEGMENTS
Shipbuilding
We have overcome a very tough year in the
previous FY2015, when we suffered 2 OSV
contracts rescission. This financial year 2016
presented a much better reflection of our
shipbuilding capabilities. We achieved a higher
revenue and a gross profit in FY2016; a reversal
from FY2015’s negative revenue and a gross
loss. In this financial year under review, we
delivered 2 units of tugs and 9 units of barges.
We have also made a conscientious effort to
undertake non-OSV shipbuilding contracts
and have secured 4 new contracts, to build
tankers for Asian-based state-owned entities
totaling $32.5 million. We will maintain the same
strategy in the coming financial year.
As of June 30, 2016, the Group has a total
outstanding shipbuilding order book from
external customers approximating $223 million
for 22 vessels, comprising harbour tugs,
barges, tankers and OSV. These vessels will be
progressively delivered to the customers up to
the fourth quarter of FY2019.
Currently, we have 3 units of AHTS in our
Build-to-Stock (BTS) program. They are being
constructed in our shipyards in Batam and
China and are expected to be completed by
March 2017. We are actively looking for buyers
or charterers for these vessels. In view of the
weak demand for OSV, we will not continue
with the BTS program until the market improved
in future.
For the 3 PSVs under the earlier contract
rescissions, we are also proactively looking for
buyers or charterers, albeit strong headwinds
in this depressed PSV market.
Shiprepair and Conversion
Shiprepair and conversion segment has
performed in line with our expectation.
Given the downturn in offshore oil and gas
sector, revenue declined as there was an
absent of large rig, OSVs repair and conversion
jobs. However, owing to the demand for
mandatory repair and docking of vessels, our
extensive shipyard facilities and resources,
our excellent track record, and stable client
network, we delivered stable revenue (excluding
large rig repair works in FY2015) with improved
profit margin. We expect to see continuous
dryness in conversion jobs for OSVs and
mainly only sustenance repair jobs in the next
financial year.
Shipchartering
We have been fortunate to have stayed put on
our core non-OSV fleet. Out of total fleet of
229 vessels, only 7 are OSVs. As such, we have
managed to increase our revenue in a difficult
time when many ship-owners saw declining
revenue. Our feat was made possible by our
focus to maximize our strength in servicing
customers in the marine infrastructure and
transportation sectors. These sectors are
helped by the buoyant reclamation, coastal
development and infrastructure projects in
Singapore, Southeast Asia and Bangladesh.
16
ASL Marine Holdings Ltd.
Annual Report 2016
