Coastal Contracts in seven OSVs sale

Malaysia’s Coastal Contracts Bhd has secured contracts for the sales of seven Offshore Support Vessels for approximately RM444 million ($136.4 million).

Coastal Irene

Clinching of these new contracts has further strengthened the Group’s already sizeable order book to RM2.6 billion. Of this, the vessels sales order book constituted RM1.4 billion. The balance order book comprised RM1.2 billion for the Group’s first Jack-up Gas Compression Service Unit (“JUGCSU”) charter contract for Pemex.

All of these vessels are expected to be delivered in 2014 and 2015. 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 years ending 31 December 2014 and 31 December 2015.

Ng Chin Heng, the Executive Chairman of Coastal, commented: “I am pleased to announce that Coastal Group has secured contracts for sale of seven OSVs for an aggregate value of approximately RM444 million. These latest contracts will be one of the largest vessel sales orders for the Group since its public listing in August 2003. We are quite optimistic with the market outlook of OSV, which is underpinned by replacement cycle of older OSV and stable crude oil price. In addition, previous years of successful exploratory drilling will require more support from OSV.

“We look forward to meeting our customers’ expectations with quality and timely delivery of our vessels as well as capitalise more opportunities during the replacement cycle of older OSV given that 25% of current global OSV fleet is more than 25 years old.”

Ng further added: “Other than the strong momentum for our Shipbuilding Division, we are on track for the completion of our first high-specification Jack-up Rig – Coastal Driller 4001 and our first JUGCSU.

With the completion of Coastal Driller 4001 by Q4 2014 and the completion of JUGCSU by 1H 2015, Coastal Group will emerge as a strong player in the lucrative O&G value chain. I believe we are sailing towards the right direction.”

Press Release, September 26, 2014