ASL Marine has been able to slash the red ink in its second quarter, despite continued Covid-19 restrictions that hampered operations.
The Singapore-listed shipbuilder and vessel charterer lost SGD 7.25m ($5.39m) in the three months to 31 December, versus a negative result to the tune of SGD 12.4m 12 months earlier.
Revenue increased by 16.4% year on year to SGD 53.2m, but operating costs rose by almost 11% to SGD 51.8m.
ASL Marine attributed the increase in revenue to higher contributions from its ship chartering and ship repair segments, while shipbuilding revenue was down almost 20%.
Charter revenue increased by SGD 8.1m, or 55.2%, to SGD 22.8m in the quarter, mainly due to revenue from several towage contracts in the Asia Pacific region, as well as contributions from a long-term overseas charter contract that started in late 2020.
Ship repair, conversion and engineering services revenue increased by SGD 2m, or 9.3%, to SGD 23m in the second quarter, mainly due to more high-value ship repair jobs undertaken.
ASL Marine said it will keep focusing on securing orders for standardised vessels such as tugs, barges, tankers and dredgers, which have shorter delivery cycles and are less capital-intensive.
It will also continue to exercise caution with its selection of customers based on their creditworthiness.
As of 31 December 2021, ASL Marine said it had an outstanding shipbuilding orderbook from external customers worth around SGD 51m for five vessels, with progressive deliveries up to late 2024, while its outstanding ship chartering orderbook was worth around SGD 48m with respect to long-term contracts.
“Whilst demand for ship repair services [is] still affected by Covid-19-related movement controls in Indonesia and Singapore, such restrictions have been progressively loosened as both countries pivot to treating the coronavirus as endemic,” the company said.
“Travel restrictions have been eased but these measures have not translated to foreign skilled labour, there is still a shortage of such labour in Singapore.
“In addition, compliance with required Covid-19 testing protocols as well as increased weekly testing especially in Singapore still remain a burden, adding to time and cost of operations for both the yard and vessel owners.”
ASL Marine expects continued pressure on charter rates due to market competition and the pandemic.
“The management will continue to focus on increasing utilisation of its fleet, widening geographical coverage and raising operational efficiency,” it added.
