By MARK RAO / Pic By MUHD AMIN NAHARUL
Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) returned to profit after seven consecutive quarters of losses due to the absence of a large provision and lower operating losses.
For the quarter ended Sept 30 this year (3Q17), the offshore and marine service provider registered a net profit of RM16.41 compared to a net loss of RM4.53 million in 3Q16. Revenue, however, fell 35.4% to RM215.35 million over the same period. The last time MHHE registered a net profit was in 3Q15.
In the heavy engineering division, MHHE recorded an operating loss of RM1.8 million for the quarter, lower than the RM21.6 million loss posted in 3Q16 due to the finalisation of completed projects.
The segment achieved lower revenue at RM117.6 million, a 47% year-on-year (YoY) decline due to the lower backlog of works following the completion of offshore projects.
In the marine division, operating profit slipped by 14.6% YoY to RM17 million following the lower turnover of RM97.7 million.
The drop in revenue was mainly due to the lower value and number of vessels repaired in the quarter.
For the whole period of 3Q, MHHE remained in the red, recording a net loss of RM13.9 million due to the scarcity of offshore work.
The oil and gas (O&G) service provider posted its first net loss in over five years after making a RM141 million impairment provision in 2016.
Going forward, the company said the O&G outlook remains uncertain due to heightened geopolitical and robust shale production, subsequently subduing oil prices over a prolonged period.
“The group remains committed to its strategy in managing costs, optimising its resources and improving operational efficiency to combat the challenging environment,” MHHE told Bursa Malaysia yesterday.
“Replenishment of order-book from the marine segment and offshore services are progressing and remain a priority.”
MHHE said the recently secured offshore fabrication projects would contribute to the group’s earnings and revenue next year.
The company’s share price rose 8.6% to close at 82 sen yesterday, valuing the company at RM1.31 billion.