The group reported a 83.7 percent decrease to US$10.3 million in shipbuilding revenue for 3QFY2015, explaining that it was due to several of the ongoing shipbuilding projects being completed either in previous quarters, or were near completion in the third quarter. This revenue partially mitigated the impact of the US$70.1 million reversal on recognised revenue of the previous quarter as a result of the rescission of two OSV shipbuilding contracts in December 2014.

The shipbuilding segment incurred a gross loss of US$1.18 million for the quarter, predominantly due to an overrun in subcontractors’ costs as the group was committed to completing the construction and make timely delivery of four units of tugs, delivered by April 2015.

Ang Kok Tian, Chairman and managing director of the group, commented: “Lower oil prices have led to fewer new shipbuilding orders for offshore support vessels.” Despite this however, the group still has an outstanding shipbuilding order book from external customers of an estimated US$190 million for 18 vessels as of 31 March 2015.

“While the shipbuilding segment encountered a setback in late 2014 due to the harsh business environment, there has been stabilised progress in the others,” Mr Ang added.

One of these was shipchartering. As of 31 March 2015, the group had a shipchartering outstanding order book of an estimated US$42.8 million in long-term contracts.

“Shipchartering results were stable as our non-offshore related vessels, such as tugs, work barges, dredgers, and tankers were less impacted by offshore market, and they benefited from the lower logistic costs brought by lower oil prices,” Mr Ang explained.

On an outlook for the year, Mr Ang said: “The upcoming major infrastructure projects in Singapore, Malaysia and Indonesia are expected to improve the demand for our support equipment, and hence stimulate our ship chartering business. Barring any unforeseen circumstances, the group is expected to remain profitable for the year.”