Singapore's long winter offshore industry is still not over, at least two companies announced a loss.
CH Offshore, a carrier for marine carriers, reported a substantial loss in 1HFY2018 due to a significant reduction in vessel utilization and charter costs, with a net loss widening to USD 2.2 million from the previous level of USD 289,000. CH Offshore said the first half of fiscal year 2018 losses widened due to a drop in revenue by nearly a third, from $ 8.7 million in FY 2017 to $ 6.1 million.
CH Offshore said in a stock market announcement that ship utilization dropped to 2.4% in the first half of FY 2018 to 68.2% due to a significant drop in vessel rentals. Meanwhile, revenue in the second quarter was even worse, down 34% from a year earlier to $ 2.4 million. Ship utilization in the second quarter decreased 6% YoY to 58%. The company noted that with the drop in ship utilization, the cost of shipping dropped by 8% while the decline in revenue masked this because the previously chartered vessels were chartered by bareboat charter.
CH Offshore said despite the optimism that the global oil market has shown signs of stabilization and recovery in recent months and that offshore exploration activities have increased. However, the offshore support ship industry is still facing excess capacity, causing the OSV market to oversupply, putting downward pressure on ship utilization and charter costs. Looking ahead, as oil prices rise, demand for oil development is favorable and customer sentiment has improved. However, due to the time required for the planning and approval of the new offshore project, it is expected that the growth in demand for offshore supply vessels (shipbuilders trading) will not be realized until late 2018 or early 2019.
Meanwhile, integrated maritime services and shipyard ASL Marine warned that it expects to see a loss in the first half of FY18 due to weaker operating contributions, but some losses will be offset by higher operating income.