KUCHING: Shipbuilder TAS Offshore Bhd anticipates higher demand for tugboats brought about by increasing demand for coal in Indonesia as fuel for its power plants.
The Sibu-based company said most Asian countries, according to DBS group research, still rely on coal to power up the whole nation, and this will keep coal prices buoyant.
“Indonesia’s 35,000MW power plant projects will lead to higher demand for coal, as approximately 40-50 percent of these projects involve coal-fired power plants.Thailand is phasing out its gas focus and moving towards coal.
“The Indonesian coal sector still offers attractive prospects.The bright outlook for coal mining industry in Indonesia will have positive impact on the mining support services industry, such as transportation activities, and is expected to spur demand for more tugboats.
“Our group is looking forward to reap further benefits from this development,” TAS said on prospects going forward as the company released its latest quarterly results.
In the second quarter to Nov 30, 2018, TAS delivered two tugboats and one unit of harbour tug to its clients.
In the latest third quarter ended Feb 28, 2019, TAS group’s net losses widened to RM1.25 million from loss of RM569,000 in the preceding year corresponding period despite an increase in revenue to RM8.73 million from about RM7.4 million.
Indonesia contributed the bulk or RM8.24 million to group revenue in the quarter under review, with the balance RM497,000 from Malaysia.
Over a nine-month period to Feb 28,2019, TAS group’s net profit improved to RM987,000 from RM104,000 a year ago as revenue rose to RM33.5 million from RM29.5 million.
Revenue contribution from Malaysia amounted to RM17.3 million, slightly exceeded the RM16.3 million chipped in by Indonesia over the nine-month period.
Commenting on rising global oil prices and improving oil and gas industry climate with higher activity levels, TAS said the industry players are becoming optimistic on potential surge in demand for offshore support vessels.
“Oil prices hit a 2019 high above US$69 a barrel in early April on the prospects that more sanctions on Iran and the halt of a key crude terminal in Venezuela could further impact the Opec-led (oil) supply cut.
“According to a Reuters survey, oil prices were also underpinned after Opec oil supply sank to a four-year low in March, and positive data from the world’s biggest economies, the United States and China also bolstered oil prices.
“Figures showing a rebound in US factory activity in March and a return to growth in Chinese manufacturing eased concern that an economic slowdown could weaken oil demand,” it added.
Brent crude is on an uptrend, trading close to US$72 a barrel and Nymex at about US$64.5 a barrel currently.
