Coastal Contracts Bags $44M Contracts to Build 8 Vessels, Including 3 OSVs

Malaysia's Coastal Contracts Bhd (Coastal or Company, and together with its subsidiaries Coastal Group or Group) disclosed Thursday that its wholly-owned subsidiaries, Coastal Offshore (Labuan) Pte Ltd. and Thaumas Marine Ltd. have collectively secured contracts for the sale of three units Offshore Support Vessels (OSV) and five units low-end vessels for an aggregate value of approximately $44 million (MYR185 million).

As of to date, the Group’s order book is approximately $660.1 million (MYR 2.77 billion). Of this, the vessels sale order book constituted $288.2 million (MYR 1.21 billion). The balance order book comprised $371.6 million (MYR 1.56 billion) for the Group’s first Jackup Gas Compression Service Unit (JUGCSU) charter contract for Petroleos Mexicanos (Pemex). All of these vessels are expected to be delivered in 2016. Consequently, the revenue stream from these vessels is expected to contribute positively to the top and bottom line performance of the Group for the new financial period ending June 30.

Ng Chin Heng, the executive chairman of Coastal, commented:

“I am glad to announce that Coastal Group has secured its third batch of vessel sales orders for its new financial period ending June 30, 2016. These latest contracts win will strengthen our war chest in such a lacklustre market."

“Oil prices has slid for more than $100 a barrel since mid-2014 to less than $30 a barrel in January 2016. Due to the low price pressure, major oil producer, Russia together with some OPEC members, namely Saudi Arabia, Venezuela and Qatar has agreed to an oil production freeze plan in order to prevent the oil price from falling further. We believe that such initial step taken by several oil majors is a positive sign towards other players joining forces for the recovery of the oil price.”

Ng further added:

“At the meantime, our JUGCSU is expected to commence its operation in Mexico under Pemex contract in the first half of 2016. The JUGCSU would provide us with a steady source of recurring income.”

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