Extracted From Annual Report 2024

Dear Shareholders, 

On behalf of the Board of Directors (“Board”), I am pleased to present the Annual Report of CH Offshore Ltd. (“CHO” or the “Company”) and its subsidiaries (collectively, the “Group”) for the financial year ended 31 December 2024 (“FY2024”).

2024 was a year of significant economic and geopolitical turbulence. The global economy continued to grapple with persistent inflation and high interest rates, while escalating geopolitical tensions, particularly between major powers, created further uncertainty. The ongoing Ukraine-Russia war and the prolonged Israel-Hamas conflict remained key disruptors, especially in the energy sector, where sanctions against Russia and renewed instability in the Middle East contributed to volatility. Oil prices largely fluctuated within a range of US$69 to US$91 per barrel (Brent Crude Oil), with downward pressure driven by weakening global demand. At the same time, OPEC+ nations exerted considerable influence through production cuts, while geopolitical instability in the Middle East raised concerns over the security of vital shipping routes, including the Suez Canal.

The energy transition continued to gain momentum, yet fossil fuels remained central to global economic activity. In 2024, we observed a strategic shift among major European energy companies, with a renewed focus on oil and gas over green projects in pursuit of near-term profitability. The offshore wind sector faced challenges, including limited profitability, credit constraints, supply chain delays, and policy uncertainties, all of which underscored the complexities of the energy transition.

In the offshore support vessel market, 2024 saw an improvement in day rates and utilisation. However, market sentiment remained volatile, driven by seasonality, market activity, and vessel availability. The year began on a strong note, but uncertainties emerged as the industry faced localised destabilising factors. Notably, rising tensions between Petroleum Sarawak Bhd (Petros) and Petroliam Nasional Bhd (Petronas) over the supervision of oil and gas trading in Sarawak created further market uncertainty in the fourth quarter whilst Saudi Aramco’s decision to halt oil production expansion since the early part of the year resulted in the suspension of 30 rigs as of December 2024. High interest rates and limited financing options continued to restrict new vessel construction, with long-term charters providing some stability. Despite the challenges of 2024, we remain committed to navigating market uncertainties, driving sustainable growth, and positioning ourselves for long-term success in an evolving energy landscape.

FINANCIAL PERFORMANCE REVIEW 

Revenue increased by 8.9% from $24.09 million in FY2023 to $26.23 million in FY2024. The increase was due to higher revenue generated from CHO-owned vessels due to the increase in utilisation rate from 44% in FY2023 to 54% and increase in charter rates in FY2024. This increase was however offset by a decrease in revenue from third party-chartered vessels.

The Group recorded a profit after income tax of $1.32 million in FY2024 compared to the net loss of $8.25 million in FY2023. The profits in FY2024 was mainly due to higher gross profits, absence of impairment loss on vessel but offset by higher provision of income tax expenses.

Vessel operating expenses in FY2024 of $15.14 million was lower than FY2023 of $20.09 million as the Group incurred higher operating costs when CHO-owned vessels were not utilised and higher charter expenses in line with the higher revenue from third party charter-in vessels in FY2023. Direct depreciation in FY2024 of $4.93 million was slightly higher than $4.72 million in FY2023 due to the completion of drydocking of one of the Group’s vessels.

Corporate overheads and other administrative expenses increased by 15.2% from $3.24 million in FY2023 to $3.73 million in FY2024 mainly due to the higher payroll and higher professional fees. Other expenses decreased by 83.3% from $5.17 million in FY2023 to $0.86 million in FY2024 mainly due to the impairment loss of $3.10 million in FY2023 and lower expected credit loss on trade receivables in FY2024.

The Group’s shareholders’ equity increased from $39.89 million as at 31 December 2023 to $41.03 million as at 31 December 2024 due to the profit of $1.14 million earned in FY2024.

Cash and cash equivalents increased from $4.73 million as at 31 December 2023 to $7.85 million as at 31 December 2024 mainly due to higher cash generated from operating activities but partially offset by higher drydocking costs of vessels.

IN APPRECIATION

As I mark my first year on the Board, I am deeply grateful for the warm welcome and collaboration extended to me by my fellow Board Directors and the senior management of the Group. Speaking on behalf of my fellow director, Mr Tham Chee Soon, we are grateful for the support we have received over the past year and remain committed to working together to foster continued growth and progress in the years to come.

I would also like to take this opportunity to express my sincere gratitude to Mr Tan Kian Huay and Mr Tan Pong Tyea, who retired from the Board at the conclusion of AGM 2024. We are profoundly grateful for their service and leadership and we extend our heartfelt appreciation for their lasting impact.

On behalf of the Board, I would also like to extend my deepest thanks to our dedicated employees and valued stakeholders. From the front lines to our leadership team, our employees have demonstrated unwavering commitment, resilience, and passion, transforming challenges into opportunities and driving our collective success.

Equally, the trust and collaboration of our stakeholders — including investors, partners, suppliers, and customers — have been instrumental in our continued growth and evolution. Your support has strengthened our company and laid a strong foundation for a promising future.

Thank you for your commitment, dedication, and belief in our shared vision. Together, we will continue to chart a course toward sustainable
growth and long-term success.