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Saturday, September 27, 2014

Coastal gets RM444m vessel orders


PETALING JAYA: Coastal Contracts Bhd’s latest contracts for the sale of seven offshore support vessels (OSV) for about RM444mil will increase the group’s order-book to RM2.6bil.
Executive chairman Ng Chin Heng said that the contracts would be one of the largest vessel orders for the group since its listing in August 2003.
As 25% of the current global OSV fleet was more than 25 years old, Ng saw more opportunities for OSV replacement.
He said Coastal Contracts was optimistic of the market outlook as crude oil prices were stable while successful exploratory drilling required more OSV support.
“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 jack-up gas compression service unit (JUGCSU),” Ng said in a statement yesterday.
Coastal Driller 4001 and the JUGCSU are slated for completion by the fourth quarter of 2014 and the first half of 2015, respectively.
Of the oil and gas firm’s current order-book of RM2.6bil, sales of the vessels amounted to RM1.4bil while the balance RM1.2bil was for its JUGCSU charter contract for Mexico’s state-owned oil company Petroleos Mexicanos.
Coastal Contracts expected positive contribution from the sale of the vessels to its revenue and earnings for the financial years ending Dec 31, 2014 and 2015.
Coastal Contracts shares added 19 sen to RM4.89, with 954,800 shares traded. At the last close, the counter was traded at a price-to-earnings ratio of 13 times.
Analysts tracking the counter pegged its 12-month target price at RM5.92.
The company’s revenue jumped 50% to RM467.07mil for its first half ended June 30, while earnings rose 54.3% to RM97.39mil compared with a year earlier.

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