New contracts for Coastal GroupYard News // April 24, 2013
Coastal Contracts Bhd and its subsidiaries Coastal Group have announced that its wholly-owned subsidiaries, Coastal Offshore (Labuan) Pte Ltd and Thaumas Marine Ltd have secured contracts for the sale of seven offshore support vessels and two oil barges for an aggregate value of approximately RM434 million.
Among the seven OSVs sold by Coastal Group, four PSVs were sold to new customers from the Netherlands and West Africa; one Utility Support Vessel (USV) and one DP2 ROV Support/Maintenance Vessel were sold to new customers from Malaysia and Italy; and an AHTS was sold to a Norway-based customer, Vega Offshore. The vessel for Vega Offshore, will be upgraded to include oil spill recovery capability before commencement of her employment with Petrobras, Brazil.
The vessels are scheduled for delivery during 2013 and 2014. The revenue stream from the vessels is expected to contribute positively to the top and bottom line performance of the group for the financial years ending 31 December 2013 and 31 December 2014.
As of today, Coastal Group has approximately RM720 million worth of vessel sales orders awaiting delivery to customers up to 2014.
Mr Ng Chin Heng, the Executive Chairman of Coastal, commented: “I am pleased to announce that Coastal Group has secured contracts for sale of nine vessels for an aggregate value of approximately RM434 million. These latest contracts will be one of the largest sales orders for the Group since its public listing in August 2003.
"We feel very honoured to be part of our new customers’ fleet expansion programme. Not only will we be able to further widen our global presence as a reliable shipbuilder to the new markets such as West Africa and Norway, this is a great opportunity for us to pursue our growth strategy and to penetrate the sizeable oil and gas market.
Mr Ng added: "The year 2012 was a challenging year for Coastal Group. The global shipbuilding industry continued to face challenges of overcapacity of yards, sluggish newbuilding orders and competitive pricing of less sophisticated vessels.
"Nonetheless, oil and gas market outlook for 2013 remains positive and this will continue to spur oil majors to increase capex spending on exploration and production.
"Hence, we expect sustained recovery in the OSV market soon, especially demand for higher-end OSVs. Our latest contracts may be a good indicator for OSV market’s rebound momentum.
Moving forward, Coastal will focus on building and selling more technologically advanced and deepwater-capable OSVs that can withstand harsher environment.”