Posted on August 31, 2021
DredgeWire exclusive
ASL Marine has submitted its 2021 report.
Group Revenues fell 20.8% from S$244mm to S$193mm. One Singapore dollar equals about US$0.74. Losses before tax were S$40.6mm with an income tax credit of S$3.7mm.
Given ongoing losses, and concern about its ability to operate as an “ongoing concern,” ASL says that “controlling shareholders of the Company remain supportive to the Company ..with their injection of funds.”
Interest-bearing loans are now almost three times shareholder equity.
Revenue in the segment including Vosta dredge part components actually rose 11% from S$74mm to S82mm. Gross margin rose from 7.5% to 15.6%.
That segment also includes ship repair and conversions.
The Company offered this assessment of market conditions:
Market and industry outlook:
The COVID-19 pandemic has severely disrupted global economic activity, and led to both demand- and supply-side shocks to worldwide economy. As our businesses are primarily reliant on the market conditions in the infrastructure, shipbuilding and shiprepair, shipping and offshore & marine industries, the main macroeconomic variables we are sensitive to include global trade, oil price and infrastructure spending in Asia.
The drop in global trade, the disruptions to global supply chains, the flight to safety in financial markets and the reduction in consumer and business confidence are all expected to take their toll on future economic activity, and is prolonged given the COVID-19 pandemic.
Macro trends remain mixed and uncertain in near term in view of
a). WTI crude oil price was trading at around US$63 a barrel as of 20 August 2021. Recent oil prices came under pressure with concerns about a recovery in demand stoked by increasing coronavirus infections while the commodity was weighed by a climb in the US dollar’s value against major currencies.
Growth prospects depend on many factors, including the magnitude and duration of the COVID-19 pandemic, the degree to which current containment measures are maintained or reinforced, the time until an effective treatment or vaccine is effectively deployed, and the extent to which significant fiscal and monetary policy actions support revival of market demand.
b). Global GDP is projected to rise by 53⁄4 per cent in 2021 and close to 41⁄2 per cent in 2022. The world economy has now returned to pre-pandemic activity levels, but will remain short of what was expected prior to the crisis by end-20222.
c). Governments and public authorities may selectively proceed on infrastructure projects as soon as normality returns so as to reinvigorate the construction industry and the wider economy. This will spread across all areas of transport infrastructure and energy and utilities. The post COVID-19 long-term prospects for infrastructure investment in the Asia-Pacific region remain positive, reflecting the need to expand and modernise transport infrastructure and utilities to cope with the region’s demand growth amid rising economic prosperity and urbanisation.
While it is difficult to prognosticate when normality will return or when we will adjust to a new normal, the management, with the support of various stakeholders, will continue to navigate and manage foreseeable risks and long-run disruptions that the current political, social, and economic environment presents.
We will continue to focus on our core business and strengthen our foothold in supporting the marine infrastructure work in Singapore and abroad. We are exploring more revenue sources by going beyond our traditional markets (Southeast Asia, Australia and Europe) to North Asia, the Indian subcontinent and the Middle East. We will continue to seek cash-flow-positive business opportunities across our business segments and improve assets utilisation rates.
