Labroy Marine to sail on diversification
Labroy Marine to sail on diversification
SINGAPORE (Reuter): Singapore's Labroy Marine Ltd has diversified its operations to counter the volatility in shipping freight and charter rates, company officials said.
The firm has forecast a turnover of Singapore $77.3 million for the 1996 financial year and a pretax profit of S$12.4 million, compared to a turnover of S$69.4 million in 1995 and a pretax profit of S$11.2 million.
For the seven months ended July, the company recorded a net profit of S$6.8 million on a turnover of S$47.7 million.
The group offers a range of marine services, primarily shipping, ship building, ship repair, ship conversion and fabrication of marine structures.
Executive chairman Tan Boy Tee said Labroy was building a floating dock that will expand the capacity of its shipyard in Batam, Indonesia, to handle 16 to 17 ships at one time from the current capacity of 12 ships. The dock is scheduled to be ready by the end of 1996.
Tan was speaking at a briefing of the company's initial public offer on Wednesday. Labroy is offering 52 million shares at S$0.69 each.
The company plans to build bigger vessels, particularly tugs, barges and product tankers in the 1,000 to 6,000 DWT range, he said.
Tan said livestock transportation was one of Labroy's key growth areas, contributing 10 percent or S$1.2 million of its pretax profit in 1995. The company has added two more livestock carriers this year, bringing the total to four.
"Our diverse fleet of 110 vessels meets varied customer needs in terms of size, types of goods carried and horsepower. Our livestock shipping business is also supported by our own wharf in Darwin, Australia," he said.
Labroy's marine business is concentrated in Asia, in particular in Indonesia and Malaysia.
On the company's dependence on Indonesia, where it derived about 45 percent of its pretax profit, Tan said it was logical for the company to continue to "make money there" so long as the country continued to grow and was politically stable.
He noted that Labroy had signed a letter of intent to charter product tankers to Indonesia's state-owned oil company, Pertamina.
According to the prospectus, the contract is being finalized. Construction of the tankers will start once the contract is signed, and the vessels are expected to be completed in 1998.