Malaysia’s Sealink International has reversed to a net loss for the first quarter ended 31 March 2016 compared to the previous corresponding period.

The first quarter loss was recorded at MYR6.21m ($1.52m) as against the profit of MYR2.78m in the same period of 2015.

Kuala Lumpur-listed Sealink reported a quarterly revenue of MYR55.5m, an increase of 62.9% from MYR34.08m, thanks to the sale of two OSVs.

“The group has also signed another sale contract in the current quarter and the sale will be recognised on delivery of the vessel to client,” Sealink said.

Despite the higher revenue, a loss was registered mainly arising from competition, lower utilisation of vessels for charter and lower foreign exchange gain, the company said.

“Notwithstanding the challenges faced in the industry, the group’s shipbuilding division will be looking towards building vessels which have a niche market like landing crafts, as well as enhancing its docking (ship repair) facilities, whilst continuous efforts will be taken towards optimising capacity utilisation of the group’s vessels, which currently number 38 units of various make and tonnage,” it said.

Charter rates are expected to stagnate or even weaken in the midst of oversupply of vessels, Sealink added.

“We anticipate that 2016 will continue to be a challenging year where charter rates will likely be flat or weaken, with shipbuilding activities curtailed since crude oil prices are not expected to be northbound from the current levels in the short term,” it commented.