Penguin International saw its 1H20 earnings slashed by half to $3.9 million from $8.4 million in 1H19, as it was negatively affected by the Covid-19 pandemic and weak oil prices.
Revenue for the period dipped 26.2% to $50.1 million from $67.9 million a year ago
As cost of sales dropped 23.7% y-oy- to $37.5 million, gross profit for the six months ended June came in at $12.6 million, 32.9% lower than $18.8 million last year.
Other operating income saw a 61.8% increase to $5.8 million from $3.6 million.
Overall costs and expenses increased, with marketing and distribution costs increasing 121.5% y-o-y to $175,000 and administrative expenses increasing 5.2% y-o-y to $10.2 million, while other operating expenses remained flat at $3.6 million.
As at end-June, Penguin’s cash and cash equivalents stood at $52.6 million.
Although the group has been hit hard by the effects of Covid-19 and the weak oil prices, none of the group’s clients has sought to terminate any shipbuilding contract, although some vessel deliveries have been delayed by mutual agreement.
The lockdown of foreign workers’ dormitories in Singapore had affected the group’s in-house and subcontracted labour, resulting in delays to the group’s internal newbuilding projects for its chartering fleet. As of Aug 6, all in-house foreign workers are back at work while most subcontracted foreign workers are still under lockdown.
To conserve cash, the group has either halted or slowed down some of its uncommitted build-for-stock vessels. All committed build-for-stock and build-to-order vessels are being completed as scheduled. And to further strengthen its cash position, Penguin has obtained and drawn down on a $5 million unsecured term loan under Enterprise Singapore's Temporary Bridging Loan Programme (TBLP).
Notwithstanding the challenges, the group says that is still working hard to secure new build-to-order projects across various market segments, as it expands its geographical reach. Its Batam shipyard is currently building various types of vessels for ship owners from Southeast Asia, Australia, North Asia, Africa and Europe.
Meanwhile, regardless of good or bad times, Penguin says that it will continue to manage its cash flow and business conservatively.
Shares in Penguin closed at 44 cents on Aug 6.
