Net profit in the first quarter ended 30 September 2014 plummeted 76.5% year-on-year to SGD3.01m ($2.33m) from SGD12.79m in the same period of last year.
Revenue dropped by 53.8% year-on-year to SGD68.53m due mainly to lower earnings from the shipbuilding division, and ship repair and conversion division.
Other operating expenses increased by SGD1.2m due to foreign exchange losses and a write off of two units of barges, Singapore-listed ASL Marine announced.
The Singapore-based firm said the overall business climate for the shipbuilding industry has been challenging due to less demand and the overcapacity issue.
Coupled with the recent slide in oil prices, demand for new OSVs is expected to reduce thereby leading to increased competition in the offshore oil and gas market and ASL Marine has experienced some challenges in securing new orders.
Shipbuilding margin has also continued to remain weak due to the depressed pricing and rising labour costs.
“Looking ahead, we expect the market will remain tough and challenging in remaining part of FY2015, however, we think the demand for charter of vessels will improve as port expansion and marine infrastructure in the region are going on,” said Ang Kok Tian, chairman and managing director of ASL Marine.
As at 30 September 2014, the group had an outstanding shipbuilding orderbook of approximately SGD298.7m for 24 vessels, which will be progressively delivered up to the first quarter of its financial year 2017. The orderbook comprised OSVs, AHTS vessels, tugs and barges.
The outstanding orderbook for long term shipchartering contracts stood at about SGD68.8m.
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