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ASL Marine increases Q1 earnings in weak offshore market

ASL Marine increases Q1 earnings in weak offshore market
Singapore’s OSV shipyard ASL Marine has improved its results for the first quarter of its financial year 2016 compared to the year-ago period.

Net profit for the first quarter ended 30 September 2015 was registered at SGD5.25m ($3.73m) compared to SGD3.01m in the previous corresponding period.

Revenue rose by 10.8% year-on-year to SGD75.95m due mainly to contributions from the ship chartering division with the addition of two grab dredgers.

During the first quarter, ASL Marine’s ship chartering operations took delivery of four vessels with a total worth of SGD6.6m.

As at 30 September 2015, the group had an outstanding orderbook of approximately SGD342m for 22 vessels with progressive deliveries up to the first quarter of financial year 2018. The orderbook comprises of AHTS vessels, tugs, barge, seismic support vessel and tanker.

“Despite the short and small rebound in oil prices in the past few months, the business environment for the offshore and marine industry remained challenging,” said Ang Kok Tian, chairman and managing director of ASL Marine.

“The reduction in capex and opex budget by upstream companies has resulted in intense competition and squeezed margin, as shown in our OSV chartering, and ship repair and conversion results,” he said.

Due to weak market conditions, the volume of newbuildings has fallen. Accordingly, competition remained intensive and prices of newbuildings have declined. Besides OSV, the group is actively involved in the building of other types of vessels such as tugs, barges, dredger and tankers which are less sensitive to low oil price.

The company added that ship repair and conversions jobs have also been affected. It noted that there are fewer jobs and the amount of money that owners are willing to spend on repair is lower.