Coronavirus and weak oil prices have combined to send Penguin International’s profit plunging in the first half.
The Singapore-listed shipbuilder, owner and operator reported a profit of SGD 3.91m ($2.85m), a slump of more than 53% from SGD 8.36m in same period last year.
Revenue for the six months was down more than 26% to SGD 50.1m, which was partly offset by a 23.7% drop in costs to SGD 37.5m.
Penguin said demand for new vessels during the period weakened and crew boat charter rates and utilisation rates fell.
However, it said none of its clients had sought to terminate any shipbuilding contracts, although some deliveries have been delayed by mutual agreement.
Back at work
The shipbuilder said the locking down of foreign workers’ dormitories in Singapore had affected its in-house and subcontracted labour, resulting in delays to internal newbuilding projects for its chartering fleet.
However, it said all in-house foreign workers are now back at work, while most subcontracted foreign workers remain under lockdown.
The company said there are currently no third-party shipbuilding projects in Singapore, with all such work being undertaken by its Batam shipyard in Indonesia, which has remained open and operational throughout.
To conserve cash, Penguin either halted or slowed down some of its uncommitted build-for-stock vessels. Its committed build-for-stock and build-to-order vessels are being completed as scheduled.
The company has also obtained a SGD 5m unsecured term loan under Enterprise Singapore's temporary bridging loan programme to strengthen its cash position.
Of the group’s key market segments, offshore wind was described as remaining “fairly resilient for now”, offshore oil and gas, and maritime protection work was “weakened but stabilised”, while orders for passenger ferries had stalled.
“Overall business sentiments in all market segments have been eroded to varying degrees by the pandemic and weakening oil prices,” Penguin said.
