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Costal Contract Bhd, a shipbuilding company has ventured to widen its
operation by expanding into offshore industries.
The company which delivered 13 units of vessels to various owners in the
first nine months period of 2005 has signed a Memorandum of Understanding
with Yayasan Sabah Dua Shipping Sdn. Bhd to operate and/or manage offshore
support vessel intended for the offshore oil and gas industry in Malaysia.
Under the agreement, a joint venture company will be set-up and Yayasan
Sabah Dua Shipping would allow the joint venture to use its licences for the
purpose of participating in tenders for works/contracts and would provide
the necessary assistance in facilitating the soliciting of business
opportunities in relation to the proposed project.
Under the arrangement, Coastal Contract would provide the related
industrial, technical, operational, management knowledge and expertise for
the day-to-day operation of the vessel of the proposed joint venture so as
to achieve optimal vessel functionality.
Costal Contract expects its strategic involvement in petrochemical and
fabrication engineering services sector would help push the group's future
earnings to a higher level.
The expansion into oil and gas sector is expected to reduce Coastal’s
contracts dependency on earnings from shipbuilding and ship repairing
sectors.
The shipbuilding and repairing division contributed RM83.94 million to the
company’s earnings in the first three quarters last year.
Besides that vessel chartering division contributed RM12 million during the
same period last year.
The company which expanded its operation into oil & gas industry in 2003 has
completed and delivered two offshore support units to two Malaysian
companies.
With over 40 vessels at different stages of construction, the group's
performance for the near-term is expected to remain positive.
Overall, the Costal Contract Group recorded revenue of RM53.3 million in the
third quarter period of 2005, representing an exceptional increase of nearly
twelve-fold against RM4.5 million in the preceding quarter in 2004. |
