KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd’s (MMHE) second quarter net profit fell 14% to RM47.55mil from RM55.32mil a year ago due to lower operating profit from its offshore and marine segments.
It revenue also fell 18% to RM786.72mil from RM965.71mil a year ago. Earnings per share were at three sen compared to 3.5 sen a year ago.
For its current year to date, its net profit fell 26% to RM98.14mil from RM133.58mil a year ago however its revenue rose 4.75% to RM1.708bil from RM1.63bil a year ago.
MMHE said its lower operating profit for its offshore segment takes into account that the newly secured Malikai TLP project has yet to recognize any profit due to its early stage of progress and provisions for higher expected costs for an on going project.
“The group is still working on several others to ensure additional cost of work done is recoverable from various intended clients,” it said.
It added during the quarter, the group has successfully loaded out Gumusut Kakap for MISC Bhd and Telok B Topside forExxonMobil Exploration and Production Malaysia Inc.
“Revenue for marine segment is comparable to the corresponding quarter. However, the operating profit recorded is lower as profit has yet to be recognized on the newly secured rigs repairs which is currently at early stage of progress,” it said.
It added the marine segment’s lower revenue due to the absence of a similar FSU project compared to last year where during the period, the revenue was derived from repair work scope only.
“However, due to better efficiency and work planning, this segment recorded a higher operating profit as the number of vessels repaired has increased from 47 to 52 for the same period,” it said.
Moving forward, MMHE said it continues to actively participate in tenders for prospective offshore development projects both in domestic and regional market.
“However, order intake has not materialized as originally envisaged as the clients are taking longer time in arriving at the final investment decision on their projects.
“Stiff competition from regional and domestic players is expected to put down ward pressure on profit margin. Hence, the group expects the offshore business performance to be challenging,” it said.
For its marine segment, MMHE said it expects performance to be within expectations despite the continued weakness of the shipping market and competition from regional players.
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