Malaysia’s Sealink International has been hit by a deeper loss in 2016 as the group took on impairment charges as a result of the sluggish offshore market.

Kuala Lumpur-listed Sealink posted a loss of MYR58.42m ($13.15m) last year, widening from its deficit of MYR7.53m in 2015.

The loss was mainly blamed on impairment charges on inventories and assets of MYR31.3m taken up in the fourth quarter.

Full year revenue dipped by 13.2% year-on-year to MYR122.86m due primarily to the significant drop in vessel charter hire income amidst reduced demand and surplus capacity in OSVs.

Sealink, which builds, owns and operates OSVs, pointed out that despite heavier losses, its cash flow from operation increased by MYR11.6m to MYR58.7m compared to 2015 thanks to the sale of three OSVs delivered to the buyer in the first half of 2016.

“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,” Sealink commented.

“We are cautiously optimistic that demand for OSVs will improve with increased expenditure in field development and maintenance work by the oil companies,” the company said.

Source: seatrade-maritime.com