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Alam Maritim seen divesting half of fleet to cut costs

Malaysia’s Alam Maritim is taking drastic measures to stem losses and keep itself viable amid the prolonged slump in the oil and gas (O&G) market, with plans to halve its fleet size as it predicts continued difficult conditions.

Local media reports quoted group md Azmi Ahmad as saying after the company’s AGM that Alam Maritim planned to cut its current fleet of 42 to half, by disposing of vessels above the age of 15 years as part of a cost optimisation strategy.

Replacement vessels would be selectively purchased through a combination of sale proceeds and other sources such as bank loans, Azmi said.

He noted that previous vessel sales had yielded between $1.5m to $2m per unit. Alam Maritim wants to boost its vessel utilisation rate from the rather low level of 47% last year to at least 60% this year.

Read More: Malaysian OSV players to be hardest hit by Petronas budget cuts

“I think fully recovering to the black is quite a challenge. If we can actually reduce the amount of losses we recorded compared with 2017, I think we should be able to have better results in 2019,” Azmi said.

The company has seen slightly better fortunes recently in line with the pick up in the oil market. Taking in the MYR226.1m ($56m) in new contract wins recently, Alam Maritim’s total current order book value now stands at MYR333m.

The O&G services provider has also tendered for projects worth MYR1.2bn consisting offshore installation and construction, offshore support vessels, and inspection repair maintenance of underwater facilities.

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