Penguin International

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Shipbuilding is generally looked upon as a cyclical business, but when a shipbuilder has a whole range of its own models that serve a multitude of end customers/industries, there could well be an overall stability in the business. From a different angle, a shipbuilder which focuses on building smaller (up to 50 metres) aluminium vessels in volume and is capable of turning around a new build in approx. 6 months, would likely have lesser/smaller operating risks in the business than say a shipbuilder producing bigger steel vessels which take say 2 years to build, including credit exposure to customers in the event of a payment default or contract cancellation.

Penguin has its own range of proven crew boats - having already built and sold over 100 of them - which primarily serve the nearer-shore offshore O&G exploration/production activities by the oil majors and their contractors, by providing a reliable and cost-effective solution in regular crew transfer, supply of provisions (water, food, fuel, etc.), and as a standby and fire-fighting vessel. In territories where there are pirates or trouble (e.g. Nigeria), Penguin's steel-plated crew boats double up as security/patrol vessels. Penguin now also has its own range of passenger ferries and fire-fighting boats. It is quite clear that having its own range of proven boat models - which are being updated on an on-going basis - has made Penguin's business stronger and survive much better than its competition until now.

We must not forget that Penguin is also pushing hard to build a profitable boat chartering business, targeting the oil majors as their direct customers. A profitable chartering business which is conservatively financed can become a valuable long term business delivering very attractive positive free cash flow. If a particular crew boat model is loved by an oil major who has chartered a few of them on a term basis, it is conceivable that buyers/boat owners from other territories would likely also consider investing in such a boat for their own chartering business.