Coastal Clinches Second Batch of Vessel Sales

Malaysia’s Coastal Contracts has through its wholly-owned subsidiaries inked contracts for the sales of two Offshore Support Vessels and six low-end vessels for an aggregate value of approximately RM130 million (USD 34 million).

All of these vessels are expected to be delivered in 2015, Coastal said in a filing to Bursa Malaysia.

Consequently, the revenue stream from these vessels is expected to contribute positively to the top and bottom line performance of the group for the financial year ending 31 December 2015.

Ng Chin Heng, the Executive Chairman of Coastal, commented: “These latest contracts win will strengthen our war chest in such a lacklustre market. Crude oil is continued trading at bearish mode due to a glut of oil in global market mainly caused by the booming shale oil in US and slowdown of global economic growth. Recent lifting of economic sanctions on oil-rich Iran may slow down the recovery of oil price.

“However, we believe the lifting of sanction on Iran could benefit Coastal Group given that some of our customers had good working relationship with Iranian oil and gas companies in the past. Iran’s inability to get access to new technologies forced it to cancel many projects to explore new fields. In view of this, post-sanction Iran could create more opportunities for the OSV market.”

Including the new contracts and after adjusting for revenue recognition from vessels delivered to buyers up to 24 July 2015, the offshore support vessel fabricator said that it has about RM1.97 billion (USD 515 million) worth of cumulative sales orders awaiting delivery to customers up to 2017.