BUKIT JALIL (Jan 30): Alam Maritim Resources Bhd said a turnaround in its financial year ending Dec 31, 2019 (FY19) is unlikely as impairments continue throughout the year, while the contracts the offshore vessel group secured last year will only see full contribution in FY20.
Alam Maritim group managing director Datuk Azmi Ahmad said the group is in the midst of getting its operations in order and its financial performance this year will continue to be affected by several factors.
"FY19 will not be the year we turnaround our operations. We are still in repayment mode and there are still a lot of factors affecting the company. One of them is the continued impairment of vessels.
"We have been impairing our vessels for a couple of years already. We have not approved any impairment rate yet for FY18. We expect FY19 to be similar and our performance will be affected by this," he said during a briefing following the group's extraordinary general meeting (EGM) today.
The group's shareholders approved all resolutions, which included the proposed issuance of redeemable convertible notes to raise up to RM160 million.
Out of the total gross proceeds, RM50 million will be used for maintenance and inspection of its existing vessels and RM80 million will be used to convert two of its diesel-powered offshore support vessels (OSVs) to liquefied natural gas (LNG)-powered OSVs, as well as to acquire new vessels.
Meanwhile, Azmi said Alam Maritim is reducing its number of vessels from 39 currently to about 25, with the group concentrating more on specialised vessels which can give it better returns. He also said the group is gradually reducing its involvement in the OSV segment.
"We are reducing the number of vessels and are focusing on certain vessels like platform support vessels (PSVs) and anchor handling tug supply (AHTS) vessels, for example.
"We believe the OSV market is saturated and perhaps it is time for us to move away — but not totally — and focus on subsea services and offshore installation and construction (OIC)," he explained.
He pointed to the group's orderbook, which is already seeing a shift away from the OSV segment.
Out of its total RM753 million orderbook, RM500 million comprises subsea services contracts while OSVs make up about RM250 million of total works secured by the group.
He said the orderbook will keep the group occupied for the next three to five years. In the meantime, Alam Maritim is tendering for RM1.3 billion worth of works and is also looking to secure more foreign contracts.
"For the subsea segment, we are looking at Vietnam and Thailand where there are opportunities. We have yet to secure any but prospects are good as there is a big requirement there," he said.