Revenue also fell 79% to HKD104.9m from HKD491.1m in the previous corresponding period as revenues from new shipbuilding orders in the last quarter of the year have not started flowing through into the books, the company said in a stock market announcement. In addition to the decrease in revenues, there is also idle capacity at the group's yards amidst the current sluggish demand in the shipbuilding market, Cosig said.
The shipbuilding segment's results were also impacted by provisions made in 2013 and 2014 for a payment deferral issue which has not been resolved yet. It reassured however that "the group also has been in advanced negotiations with other shipowners and banks and is confident of achieving greater progress in recovering the net receivables in 2015".
Bad debts rose from HKD84.8m to HKD92.3m in 2014. As a result the company's auditors have expressed "material uncertainty which may cast significant doubt on the group's ability to continue as a going concern" as current liabilities exceede current assets by approximately HKD1.25bn and the Group has net liabilities of approximately HKD778.3m as at 31 December 2014.
Looking ahead Cosig said as at 31 December 2014, the secured orderbook of the group comprised totally 11 heavy lift vessels and multi-purpose vessels. It added that specific new orders, including totally 12 multi-purpose vessels, multi-purpose vessels and chemical tankers are expected to become effective in the near future while certain new orders are currently being actively negotiated.
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