ASL Marine’s profit plunges 51% in Q4 on back of $3.8m losses

A PSV order cancellation impacted its bottomline.

Mainboard-listed ASL marine posted distinctly disappointing results in 4Q14, as its FY6/14 core net profit fell 51% year-on-year to $18.4m due to a cancellation of a PSV order and a lack of recognition of ship repair jobs.

According to CIMB, the firm posted a core net loss of $3.8m, due to shipbuilding losses which sprang from the reversal of profits due to the cancellation of a 4,700 dwt PSV order as a delivery delay resulted in the client’s cancellation.

Delays in another two sister PSV orders for the same client, leading to a provision of liquidated damages payable and costs overrun.

“However, since these are now zero-margin projects, there could be some bearing on the group’s overall margins. In addition, the loss was also partly attributed to the lack of recognition for ship conversion jobs. Ship repair jobs are only recognised when they are delivered, unlike the progressive recognition for shipbuilding. ASL is currently refurbishing four rigs and one liftboat. One of the rigs would be recognised in 1Q and the liftboat in 2QFY15. However, there is some uncertainty on the timeline for the remaining rigs. On a full-year basis, ship repair did well, recording a record turnover of more than S$100m, thanks to the completion of rig repair work and the conversion of an oil tanker,” noted CIMB.