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Quarterly Report For The Financial Period Ended 31 December 2016

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Unaudited Condensed Consolidated Statement Of Profit Or Loss
For The Quarter And Year-To-Date Ended 31 December 2016

 Income Statement

Condensed Consolidated Statement Of Financial Position
As At 31 December 2016

Financial Position

Review of performance of the Company and its principal subsidiaries

Current quarter compared with corresponding quarter of the previous financial year (4Q 2016 Vs. 4Q 2015)

The Group's performance for the current quarter under review compared to 4Q 2015 is as follow:

Review of performance

For the quarter ended 31 December 2016, the Group recorded revenue of RM13.1 million reduced by 48% compared to corresponding quarter of the previous year.

Shipbuilding Division
Shipbuilding division recorded revenue of RM916,000 for the quarter also decreased by 48% compared to corresponding quarter of the previous year. Revenue of both quarter was mainly derived from ship repair services.

Ship Charter Division
Vessels utilisation rate drop further in the current quarter and has resulted in decreased revenue by RM11.4 million or 48% compared to 4Q 2015.

Review of performance

The group suffered a loss before tax of RM36.7 million for the quarter under review after taking up an impairment charge of RM31.3 million of which RM30.5 million was for vessels.

Commentary on prospects

Although the industry is still facing immense challenges due to the double impact of overcapacity and reduced oil and gas activities globally, the optimism for the upstream oil and gas industry has improved with the gradual recovery in oil prices. Several state-owned oil companies and IOCs are reported to be preparing to boost investments in offshore infrastructure and activities in the near future. With the current surplus of offshore support vessels, the Group is very selective in the type of vessels to be built. Our main emphasis is currently on enhancing our docking (ship repair) facility and optimising the utilisation of the Group's vessels. We are cautiously optimistic that demand for offshore support vessels will improve with increased expenditure in field development and maintenance work by the oil companies. With the ongoing initiatives in rationalizing costs and reduction in gearing, we believe the Group is well positioned to tide over the current business challenges.