Shin Yang to invest RM45mil in UAE shipyard

Shin Yang Shipping Corp Bhd will use part of the proceeds raised from its initial public offering (IPO) to set up a shipyard in the United Arab Emirates (UAE) to cater to the increase in shipping operations there, said financial controller and company secretary Richard Ling “We see growing demand for medium-sized vessels there. That is why we are constructing a shipyard (in the UAE to tap the potential),” he said at the company’s listing ceremony yesterday.
According to Ling, the RM190mil raised from the listing exercise would be for capital expenditure and to finance the construction of seven new vessels, and shipyard expansion and construction.
“We are expanding our shipyard in Miri, Sarawak and building a new one in the UAE. We currently have 54 vessels operating in the Gulf. That’s why we need a new shipyard there,” he said.
Shin Yang is investing RM45mil and RM120mil for the shipyards in the UAE and Sarawak respectively.
“The shipyard in the UAE will be operational by the fourth quarter of this year while the one in Miri will be ready by the first quarter of 2011,” said Ling.
He also said three of the seven vessels would be completed this year.
About 63% of Shin Yang’s revenue comes from its shipping services, 24% from shipbuilding and the balance 13% from ship repair and metal fabrication.
Ling said the company forecast a 10% to 15% higher revenue for its financial year ending June 30, 2011 (FY11). He said the forecast was made on the back of the completion of the seven new vessels, the expansion of its existing shipyard and the setting up of a new one in the UAE.
He also said the company was confident of growth in its FY10 financial results. Shin Yang registered a pre-tax profit of RM101.7mil on revenue of RM673.5mil for FY09.
Shin Yang debuted on the Bursa Malaysia main market at a one sen discount of RM1.09 against its IPO price of RM1.10. It closed at RM1.11 with 47.9 million shares traded.