Malaysia's Coastal Contracts Bhd (Coastal or Company, and together with its subsidiaries Coastal Group or Group) announced Friday that its wholly-owned subsidiaries, Coastal Offshore (Labuan) Pte Ltd and Thaumas Marine Ltd have collectively secured contracts for the sales of seven units Offshore Support Vessels (OSV) for an aggregate value of approximately $135.73 million (MYR 444 million).
Clinching of these new contracts has further strengthened the Group’s already sizeable order book to $0.79 billion (MYR 2.6 billion). Of this, the vessels sales order book constituted $0.42 billion (MYR 1.4 billion). The balance order book comprised $0.36 billion (MYR 1.2 billion) for the Group’s first Jack-up Gas Compression Service Unit (JUGCSU) charter contract for Petroleos Mexicanos (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 Dec. 31 and Dec. 31, 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 $135.73 million (MYR 444 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 capitalize more opportunities during the replacement cycle of older OSV given that 25 percent of current global OSV fleet is more than 25 years old.”
Ng further added:
With the completion of Coastal Driller 4001 by 4Q 2014 and the completion of JUGCSU by 1H 2015, Coastal Group will be emerged as a strong player in the lucrative O&G value chain. I believe we are sailing towards the right direction.”
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