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ASL Marine sees H1 earnings slashed amid tough market

ASL Marine sees H1 earnings slashed amid tough market
Singapore shipbuilder ASL Marine saw its first half earnings slashed amid difficult market conditions in the offshore sector due to the sharp decline in oil prices.

Net profit for the first half ended 31 December 2014 was recorded at SGD4.53m ($3.34m), a dive of 77.5% compared to SGD20.11m in the same period of the previous financial year.

Revenue also plunged 86% year-on-year to SGD47.44m due mainly to a revenue reversal of SGD95m recognised in the previous financial years, following the rescission of two OSV shipbuilding contracts in December 2014.

As at 31 December 2014, ASL Marine held approximately SGD270m in shipbuilding orderbook for 21 vessels, comprising of AHTS vessels, tugs, barges and tanker. They will be progressively delivered up to the second quarter of its 2017 financial year.

Ang Kok Tian, chairman and managing director of ASL Marine, noted that the sharp decline in oil prices have impacted the prospectus and/or sentiment amongst select clients particularly those in the offshore oil E&P industru.

“The negative sentiment has in turn resulted in postponements, suspensions of projects and even cancellations,” Ang said.

He added that the company is seeing a rise in business queries for bulkers, tankers and non-oil and gas support vessels given that these vessels benefit from significantly lower operating costs on the back of lower oil prices.