ASL Marine's Profits Plummet
Singapore-based ASL Marine's profits for the second quarter ended 31 December 2014 dived 78.4% year-on-year to SGD1.432 million (USD1.05 million).
Revenue also plunged 86% year-on-year to SGD47.44m due mainly to a revenue reversal of SGD95m recognized in the previous financial years, following the rescission of two OSV shipbuilding contracts in December 2014.
The company says its first half earnings slashed on account of the difficult market conditions in the offshore sector due to the sharp decline in oil prices. According to ASL Marine's filing to Singapore exchange (SGX), the company felt that the shipping sector has been negatively impacted by the depressed prices of bulk commodities and oil prices. This market sentiment was mirrored in the weak Baltic Dry Index and by recent charter rates for various types of oil tankers.
The decline in earnings were attributed to a number of factors, including the slowdown of demand in shipbuilding orders following the sharp drops in bulk commodities and oil prices, and the significant competition in securing new building orders.
Similarly, the company's ship repair and conversion revenue were lowered in 2QFY15, down 21.3% to SGD42.95 million as compared with SGD54.6 million in 2QFY14. The decrease in revenue indicated that fewer high-value jobs - SGD1 million and above - were taken and completed.
ASL Marine is a vertically-integrated marine services group principally engaged in shipbuilding, ship repair and conversion, marine vessel chartering, marine engineering and other related services, catering to customers worldwide.
