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Alam Maritim sees steady revenue in 2017, two years to return to black

Malaysian offshore services company Alam Maritim Resources hopes to at least maintain its current revenue of MYR200m ($46.8m) to MYR300m for 2017, however warned that it would take two to three years to return to profitability.

Local media cited group managing director and ceo Azmi Ahmad as saying the results would depend on the degree of margin compression as expenses increased. He added that it was difficult to assess full year performance based on the first quarter's results due to seasonal factors as it is typically a weak quarter with the monsoon season affecting deployments and continued depression in charter rates as a result of lower oil prices and an ongoing focus on production rather than exploration activities.

“Until we reach the second and third quarters, where more activities would start coming in again, then we are able to foresee our results better,” Azmi said.

As of April, the company had secured just MYR166m worth of contracts, mostly short-term, bringing its order book to MYR390m, which will keep it busy for the next two years, while its tender book currently stands at close to MYR1bn.

Azmi said the company was actively participating in local tenders while also looking at new foreign markets, such as Qatar, Kuwait, Indonesia and Brunei in addition to its existing presence in Dubai.

Besides the offshore support vessels segment, Azmi said the company would also focus on the offshore installation and subsea services segments. Alam Maritim currently had a fleet of 43 vessels with utilisation rate of 52%, he added.

“The $60-70 a barrel oil price target is the new normal, on which our utilisation rate and vessel activities will depend on. It is not possible to repeat what we had achieved in the financial year 2012/2013, when our revenue were about MYR400m to MYR500m with oil prices at about $100 a barrel,” Azmi concluded.

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