ASL Marine Suffers First Quarter Loss
Group revenue of $84.1 million for the 3 months ended 31 March 2017 (“3Q FY2017”) was $6.0 million (6.6%) lower compared to the corresponding period in FY2016 (“3Q FY2016”). For the 9 months ended 31 March 2017 (“9M FY2017”), the Group revenue was $1.2 million (0.5%) lower compared to the corresponding period ended 31 March 2016 (“9M FY2016”).
Recognition of shipbuilding revenue is calculated based on project value multiplied by the percentage of completion (“POC”).
Shipbuilding revenue in 3Q FY2017 increased marginally by $0.1 million (0.3%) compared to the corresponding quarter. The Group has delivered a total of 7 Tugs and 1 Barge in 9M FY2017 (two Tugs of which were in 3Q FY2017).
Shiprepair and conversion
Shiprepair and conversion projects are meant to be short term in nature, resulting in revenue recognised only upon completion. With several of our shiprepair jobs being partial conversions, which take far longer than historic jobs to complete (i.e. may not complete within a quarter), revenue from shiprepair and conversions are now likely to be lumpy.
Shiprepair and conversion revenue decreased by $6.1 million (32.4%) in 3Q FY2017 and $2.9 million (6.5%) in 9M FY2017 when compared to corresponding periods mainly due to there being less high value (>$0.2 million) shiprepair jobs undertaken in 3Q FY2017.
Shipchartering revenue was 6.9% higher in 3Q FY2017 and 16.9% higher in 9M FY2017 mainly due to (i) higher contributions from operation of Tug Boats and Barges with the commencement of large marine infrastructure projects in Singapore and South Asia in 4Q FY2016 (the “New Charter Contracts”); (ii) contribution from operation of a Landing Craft acquired in 2Q FY2016 for an overseas infrastructure project commenced in end of 3Q FY2016; (iii) despite the off-hire of an Anchor Handling Tug (“AHT”) from a long term charter contract since July 2016 and lower charter rate of an Anchor Handling Tug Supply vessel (“AHTS”) since November 2016; and (iv) weaker contributions from operation of grab dredgers. Total sales rose 22.1% due to a significant rise in bunker fuel sales. There were also significant ad hoc services rendered in conjunction with the New Charter Contracts mentioned above.
Gross profit and gross profit margin
The Group gross profit decreased by $5.2 million (40.0%) to $7.8 million in 3Q FY2017 and $8.4 million (21.4%) to $30.9 million in 9M FY2017 compared to the respective corresponding periods.
Gross profit decreased by $5.8 million (27.9%) for the 9M FY2017 compared to the corresponding FY2016 period. Whilst gross profit margin were also lower at 12.2% for the 9 months mainly due to costs overruns on the construction of certain OSV and Barges, which were near completion and the low margins derived from the construction of existing barges secured in 4Q FY2016. The higher gross profit and gross profit margin in 3Q FY2017 was contributed by the building of Tugs.
Shiprepair and conversion
In line with the decrease in revenue, gross profit reduced to $2.5 million with a gross profit margin of 19.3% in 3Q FY2017. The margin was lower due to the competitive pricing on the few major projects (amount above $1 million) undertaken.
Source: ASL Marine