KUCHING: TAS Offshore Bhd (TAS Offshore) registered higher net profit and turnover for financial year 2014 (FY14).
For FY14 ended May, TAS Offshore in a filing to Bursa Malaysia said its net profit soared 114 per cent year-on-year (y-o-y) to RM28.79 million compared with RM13.46 million recorded in FY13.
At the same time, the shipbuilding company said its revenue for FY14 increased 84 per cent y-o-y to RM254.27 million against RM137.99 million recognised in FY13.
Nonetheless, the company’s net profit declined 18 per cent y-o-y in the fourth quarter of financial year 2014 (4QFY14) to RM2.53 million compared with RM3.08 million recorded in 4QFY13.
In contrast, TAS Offshore’s turnover for 4QFY14 increased 27 per cent y-o-y to RM61.3 million against RM48.39 million generated in 4QFY13.
RHB Research Institute Sdn Bhd (RHB Research) in a report said the company’s shipbuilding orderbook remains healthy supported by its strong fundamentals and opportunities to reap a higher profit margin from its build-to-stock (BTS) model.
RHB Research said,”Going forward, we believe that the company would be able to reap the benefits of its BTS model.
“We understand that the company is still actively in talks with potential customers for more contracts.
“Currently, the company is building five vessels under the BTS model, having completed about 55 per cent of its work.
“Assuming the vessels would take about two years to complete, it should complete the work in about 10 months.
“If the company is able to sell all the BTS vessels, we should see potential earnings surging in second half of financial year 2015 (2HFY15),” the research firm observed.
Meanwhile, RHB Research noted as at end of June, TAS Offshore has a total orderbook of about RM330 million.
Similarly, TAS Offshore in conjunction with the release of its FY14 and 4QFY14 financial results said the prospects of the company remains bright supported by potentially strong demand for platform support vessels and anchor handling tug supply vessels.
TAS Offshore said,”Increase in demand for modern jackup rigs entering the market will result in needs of more offshore support vessels.
“Thus, we expect the demand for both platform support vessels and anchor handling tug supply vessels to be strong.
“We also expect some of these offshore developments to come from Indonesia, Malaysia and Myanmar and foresee the oil and gas industry in the region will require the provision of various offshore support vessels.
“We are optimistic in our outlook that new demand for offshore support vessels with higher technical specifications suitable for deep sea operation will grow and demand for offshore support vessels use in shallow water remains firm.
“Our BTS business model has propelled the group to a favourable position to meet the market demand for the offshore support vessels and shorter delivery time period required by the buyers.
“Our order book remains healthy and we are optimistic of our prospect but will remain cautious in our business operation as the global economic climate remains challenging,” TAS Offshore said.
On a quarterly basis, TAS Offshore noted that it recorded lower turnover and profit before tax.
The company said its revenue decreased 46 per cent quarter-on-quarter (q-o-q) to RM61.3 million compared with RM114.29 million recorded in 3QFY14 whilst its profit before tax dropped 81 per cent q-o-q to RM2.34 million against RM12.28 million posted in 3QFY14.
TAS Offshore explained that during the preceding quarter, it generated higher revenue due to the completion and delivery of two units of anchor handling tug supply vessel, one unit of harbour tug and two units of tugboat.
TAS Offshore further noted that it posted higher profit for the last quarter due to better profit recognised on the completion and delivery of vessels in the previous financial reporting quarter.