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Downturn opportunity for moving up value chain
Bloomberg data“We have a very strong balance sheet - the best among our competitors. Our cash reserves will help us weather this down turn,” said Mr Ng.The Group had cash reserves of US$80.9 million and net gearing of 6.5 times as at 30 September 2014.
“The downturn has given us opportunity to acquire distressed assets. We will take this opportunity to move up the value chain,” he added.
Mr Ng cautioned that the Group’s first quarter earnings were affected by the following factors.
1. Monsoon season.
2. Drydocking of 3 of its largest vessels under a mandatory 5-year maintenance program, which means there will be lower service fees and higher costs from these vessels.
3. One of its dive support vessels, the Windermere, was idle.
Negative impact from the above will be mitigated by the Group’s expansion into new businesses. For example, the Group recently ventured into cable laying.
“We have traditionally been a tonnage provider. Cable laying is an important new business that we want to get into,” said Mr Ng.
“We had teething problems for our new cable laying business during 4QFY2014 but we turned around in the latter half of the quarter.
"We now have good traction with the customers and good profits.”
