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Friday, July 24, 2015

Coastal Contracts bags RM130m worth of vessel sales

KUALA LUMPUR (July 24): Coastal Contracts Bhd ( Financial Dashboard) has bagged contracts worth RM130 million for the sale of two units of offshore support vessels (OSVs) and six units of low-end vessels.

In a filing with Bursa Malaysia today, Coastal Contracts said it had bagged the contracts through its wholly-owned subsidiaries – Coastal Offshore (Labuan) Pte Ltd, Thaumas Marine Ltd and Pleasant Engineering Sdn Bhd.

It said all of the vessels are expected to be delivered in 2015.

"The revenue stream from the latest contracts is expected to contribute positively to the earnings per share and net assets per share of Coastal Group for the financial year ending Dec 31, 2015," it added.

Coastal Contracts said after adjusting for revenue recognition from vessels delivered to buyers up to July 24, 2015, the group has about RM1.97 billion worth of cumulative sales orders awaiting delivery to customers up to 2017.

To date, the group’s order book is approximately RM3.38 billion, of which the vessels and rig sales order book constitutes RM1.97 billion.

The balance order book of RM1.41 billion comprises the group’s first Jack-up Gas Compression Service Unit charter contract for Petroleos Mexicanos (Pemex).

In a statement today, Coastal Contracts executive chairman Ng Chin Heng said he sees the lifting of sanction on Iran could benefit Coastal Group given that some of its customers had good working relationship with Iranian oil and gas companies in the past.

"Iran’s inability to get access to new technologies forced it to cancel many projects to explore new fields. In view of this, post-sanction Iran could create more opportunities for the OSV market," he said.

Coastal Contracts (fundamental: 3; valuation: 3) shares closed one sen or 0.4% lower at RM2.47 today, giving it a market capitalisation of RM1.31 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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