Chairman’s Message

Mr Thia Peng Heok George
Board Chairman, Independent Director

Extracted From Annual Report 2023

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 2023 (“FY2023”).

2023 was a year of starts and stops with geopolitical events causing the greatest volatility. The continuation of the Ukraine – Russia war from 2022 and the incursion of Israel leading to the Israel – Hamas war and related attacks on maritime shipping in the Red Sea have created much uncertainty and tension in the Middle East with direct impact on the oil and gas market. The weaker than expected recovery in China, together with the high interest rates and inflationary environment has resulted in a slower global economy. Oil prices traded mainly rangebound between $71.84 and $96.55 per barrel for Brent Crude Oil. The increase in price mainly occurring in 3Q2023 was spurred by Saudi Arabia volunteering to cut production to accompany expected decreases in global oil demand. OPEC+ further announced in November 2023 that they have agreed to extend the cuts into the first quarter of 2024.

Although the inflationary environment has improved from 2022, interest rates are still expected to remain high into 2024, further driving inflation lower to target levels. On the other hand, higher inflation levels may be supported by the negative impact on global supply chains caused by the Red Sea attacks – shipping diversions have increased sailing times by 30% – 50% thereby also increasing shipping costs (further exacerbated by higher insurance costs).

The offshore sector experienced an upswing during 2023 with the supply and demand imbalance for offshore support vessels (“OSV”) narrowing due to increasing demand in the oil and gas sector and offshore wind sector. As such, the market saw improving vessel day rates and utilisation across the overall OSV market with some sectors improving more than others. However, new building activity still remains low as charter hire rates have not sufficiently picked up enough, owners are not able to easily fund the upfront equity, interest rates are high and lenders are averse to the sector.


The Group incurred a net loss of $8.25 million in FY2023 vs a net loss of $3.33 million in FY2022. The higher losses in FY2023 was mainly due to higher gross losses in FY2023, impairment loss on vessel but partially offset by lower provisions of expected credit losses.

Group revenue increased by 29.5% from US$18.60 million in FY2022 to $24.09 million in FY2023. The increase was due to higher revenue generated from third-party chartered vessels but offset by a decrease in utilisation rate from 74% for FY2022 to 44% for FY2023 for CHO-owned vessels as certain vessels, one of which is related to the arbitration proceedings, were off-hired during the year.

Operating expenses in FY2023 of $20.09 million was higher than FY2022 of $11.65 million due to higher operating costs when CHO-owned vessels were not utilised and higher charter fees in line with the higher revenue from third-party chartered vessels. Direct depreciation in FY2023 of $4.72 million was slightly higher than that in FY2022.

Corporate overheads and other administrative expenses increased by 12.6% from $2.88 million in FY2022 to $3.24 million in FY2023 mainly due to the higher payroll and higher professional fees. Other expenses increased by 31.6% from $3.93 million in FY2022 to $5.17 million in FY2023 mainly due to the impairment loss of $3.10 million but offset by lower expected credit loss on trade receivables.

Cash and cash equivalents decreased from $7.32 million as at 31 December 2022 to $4.73 million as at 31 December 2023 mainly due to lower cash generated from operating activities, lower repayment of loan from associate and incurrence of higher drydocking costs of vessels but partially offset by lower repayment of bank loan.

2024 is expected to be sluggish with lower economic growth as inflation remains stubborn and interest rates stay higher for longer. Interest rates are strongly anticipated to be cut, though the timing and rate of cuts varies across different economies. Due to OPEC+’s commitment to reduce production in early 2024, oil prices may be supported for a period of time after which if non-OPEC countries increase world oil supply, beyond oil demand growth, oil prices could face downward pressure. However expectations could change rapidly as developments in the Middle East and other geopolitical tensions potentially disrupt global flows.

Oil companies are starting to announce deployment of the cash on their balance sheet with increased exploration and production capital expenditure plans. In Asia, Petronas, as part of its three-year outlook, announced plans for more than 45 upstream projects and a number of decommissioning plans. These plans would drive up the demand for a wide range of offshore assets including rigs and offshore vessels. In tandem with the lack of new builds over the last few years, 2024 should be a year where the market could see continued rising charter hire rates and utilisation and corresponding vessel valuations.

To stay nimble in seizing opportunities while mitigating risks, we continue to focus on cost-effective operations to make better use of our capital while building on our revenue base as we capitalise on our strengths and core competencies.


We continue on our sustainability journey entering our second year of disclosing our Scope 3 emissions (as defined by the Greenhouse Gas Protocol Corporate Standard). On 26 June 2023, the International Sustainability Standards Board launched the S1 and S2 standards for sustainability disclosure aimed at capital market participants. These standards fully incorporate the Task Force on Climate-related Financial Disclosures recommendations with S1 focused on general requirements for sustainability risks and opportunities and S2 focused on climate-related risks and opportunities. If the recommendations by the Sustainability Reporting Advisory Committee (in Singapore)  are adopted, then from FY2025 onwards, we would prepare our sustainability report in line with S1 and S2.

In this era of global boiling, we embrace the need to improve the energy efficiency of operations as well as the use of low-carbon alternative energy sources as better technology is developed and becomes operationally and economically viable. We have to work closely with charterers and clients on the greener way forward so that we can better manage and mitigate climate transition risks.

Our PRIME core values (Passion, Respect, Integrity and Honesty, Monetary Discipline and Excellence) together with our “Do No Harm” mindset continue to drive our culture and operations and are integrated into our Group policies and procedures. By embracing the CHO way, we ensure that we do no harm to ourselves and to those involved and are affected by our operations, to the environment in which we operate and to our relationships with clients, subcontractors, customers, shareholders and other stakeholders.

Our employees (both onshore and offshore) are our most valuable assets and therefore ensuring a conducive environment for employees to be nurtured, trained and developed in a fair and inclusive way is critical to building a cohesive team. Our annual team building trip and social gatherings / celebrations help build closer relationships. As part of our “Do No Harm” mindset, I am pleased to share that we have consistently achieved our zero-fatality target and further to that, achieved a zero-reportable incident rate in FY2023. We also believe in supporting the community and the society that we operate in and as such have made a number of donations to various charities with a particular focus on youth.

Corporate governance is a key focal point for us and our clients. We strongly believe that good corporate governance practices is crucial to gaining the trust and support of our clients to develop long term relationships for a sustainable business and mitigate legal and regulatory risks. We are committed to improving our corporate governance practices and encourage our stakeholders to journey with us.


We are delighted to welcome Mr Tham Chee Soon who joined us as an Independent Director in July 2023 and Mr Lee Gee Aik who also joined us an an Independent Director in February 2024. We look forward to their contributions from their respective fields and experience. Mr Tan Pong Tyea and Mr Tan Kian Huay, who are stepping down after the conclusion of the forthcoming Annual General Meeting, we would like to record our appreciation to both gentlemen for their dedicated service and counsel during their past terms.

On behalf of my fellow Board members, I would like to show my appreciation to our management and employees for their dedication, continuous support and winning mindset. My appreciation also extends to our shareholders, valued customers, suppliers and other stakeholders who have stood steadfast by us through challenging times. In closing, I wish to extend my heartfelt thanks to my fellow Directors for their valuable input and guiding light through the year.

I look forward to the challenges and opportunities ahead as we build on our strategy to create long term-sustainable value for our stakeholders.