Malaysia: Coastal Contracts Secures USD 132 mil Sale Contract

Coastal Contracts Bhd announced on July 26th that its wholly-owned subsidiaries, Coastal Offshore (Labuan) Pte Ltd and Thaumas Marine Ltd have collectively secured contracts for the sale of five Anchor Handling Tug Supply (AHTS) vessels, one 300 Men Accommodation Work Barge and one 85m Subsea Support/Maintenance Vessel for an aggregate value of approximately RM 425 million (approx. $132 million).

Among the seven Offshore Support Vessels (OSVs) sold by Coastal Group, five vessels were sold to new customers from South East Asia and Africa, whereas two vessels were sold to regular customers.

The 85m Subsea Support/Maintenance Vessel is one of the high-end products of the Group, which is specifically designed to transport liquid cargo nd equipment, move men and materials between platforms, and for external fire fighting as well.

The 300 Men Accommodation Work Barge is designed to accommodate up to 300 work personnel and crew in the offshore work site. One of its main functions is to provide a better workplace to the offshore workmen.

These vessels are scheduled for delivery during 2013 and 2014. 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 2013 and 31 December 2014. As of to date, Coastal Group has approximately RM 1 billion worth of vessel sales orders pending delivery to customers up to 2014.

 Mr Ng Chin Heng, the Executive Chairman of Coastal, commented: “Following our recent order book intakes of RM434 million in April 2013, we are glad to secure another major win within a short period of time. These latest contracts will significantly replenish our vessel sales order book, which have surpassed RM1 billion. We are pleased that Coastal Group was able to capitalise the recovery in the OSV sector by securing these contract wins from existing as well as new customers. We see this as a positive development and we are looking forward to capitalise more contract inflows. We would like to thank our customers for selecting Coastal Group to execute these major contracts and for their trust and confidence in our capabilities. We are also delighted that our existing customers have again chosen to partner us in their fleet expansion programme. Our commitment to our customers will be demonstrated in timely, quality and efficient delivery of our vessels.”

 Mr Ng further added: “ Future prospects for the OSV sector look to be positive in the near future, underpinned by stable oil prices and favourable oil and gas market outlook. Continued exploration and development of offshore oil and gas discoveries will maintain interest in the offshore support sector well. In the meantime, increasing drilling activities will require greater support from AHTS. We believe that the oil and gas industry will continue to provide opportunities within the OSV market. Moving forward, greater emphasis will be placed on constructing more technologically advanced and deepwater-capable OSVs that can withstand harsher environment as Coastal Group seeks to broaden its product offering and scale up its shipbuilding value chain.”