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ASL Marine posts sharp drop in Q3 earnings

ASL Marine posts sharp drop in Q3 earnings
ASL Marine has posted a sharp drop in net profit for its third quarter as revenues from its shipbuilding, shiprepair and chartering segments fell across the board.

In the third quarter ended 31 March 2015, ASL Marine recorded a profit of SGD1.94m ($1.45m), down 65.7% from SGD5.65m in the previous corresponding period.

The quarterly revenue also dropped 56.2% year-on-year to SGD63.42m, due mainly to the 83.7% fall in revenue contribution from the shipbuilding business.

ASL Marine mentioned that several of the ongoing shipbuilding projects were either completed in earlier quarters of financial year 2015 or new completion in this current quarter, resulting in lower revenue recognition from these projects compared to the corresponding period.

Ang Kok Tian, chairman and managing director of ASL Marine, said: “Lower oil prices have led to fewer new shipbuilding orders for OSVs. As oil majors cut their capex budgets, newbuilding projects have slowed down, been put on hold or have been cancelled.”

Ang added that the ship chartering results were stable as its non-offshore related vessels such as tugs, work barges, dredgers and tankers were less impacted by the offshore market, and they benefited from lower logistics costs brought by lower oil prices.

“Shiprepair and conversion, as well as engineering segments saw improved gross profits and margins in the quarter too,” Ang said.