Scandinavian contract tempers MSL downgrade

The company says it now expects to make a loss of $400,000 for the financial year ended March, down from the forecast deficit of $46,000.

"While Mooring had forecast the delivery and installation of one system in Australia and receiving further work from the US Navy in the period to 31 March 2002, these contracts have not yet been achieved," the company says.

"Negotiations in relation to those systems and that work is continuing and is expected to continue."

The board says it is disappointed with the expected result but is extremely encouraged by the interest shown by potential Australian and other overseas purchasers.

MSL says this includes a contract with a major Scandinavian based organisation with considerable shipping interests to build a working model of its QuaySailor mooring system. The QuaySailor is a shore based automatic docking system that incorporates a stepping mechanism for tidal changes and a sideways function for ship positioning.

"The terms of the contract require that the Scandinavian party make a significant advance contribution towards the cost of testing and commissioning the QuaySailor. This will be subject to survey by an independently qualified third party.

"The payment will only be refundable if a third party purchases the test unit for implementation. Should the Scandinavian party proceed with installing the system for new vessels under design, then the advance payment will be rebated against the purchase price of the equipment."

So far the company's products, such as QuaySailor, have been tested on a desktop basis with independent peer review but management is now concentrating on building full-scale working models of products.

When built the products will be extensively tested and the company will seek independent third party certification as to compliance and capabilities before entering into binding contracts of sale.

"Mooring believes that the current approach of developing full-scale working models mitigates a considerable amount of the risk in commissioning Mooring's new products.

"This approach, while prudent, may have an adverse effect on earnings in the short term."

Construction of the working model of QuaySailor is expected to start early next month and take around 4 months to complete.

Currently MSL is in negotiations for several contracts ranging in value between $1.5 million and $3.5 million each. Potential customers include three Australian shipping companies and the US navy, as well as a project for a specialised mooring system for cruise ships in Germany.

"The company continues to receive expressions of interest in its products from a number of major trading countries. Mooring must now concentrate on proving the functionality, reliability and cost benefits of its product portfolio."

MSL's annual meeting is scheduled for July when it plans to give shareholders a complete progress update.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.