BHIC’s 3Q profit hit by weaker MRO activities

By TMR

Boustead Heavy Industries Corp Bhd (BHIC) registered a net profit of RM11.87 million for the third quarter ended Sept 30, 2018 (3Q18), compared to RM7.2 million in the preceding quarter last year.

In an exchange filing last Friday, the engineering group noted its revenue fell to RM61.4 million for 3Q18 from RM64.2 million in 3Q17 due to lower defence-related maintenance, repair and operations (MRO) activities.

Its commercial segment recorded a lower contribution of RM2.2 million due to lower operating costs, while its defence segment was affected by the lack of MRO work.

Its joint-venture (JV) companies posted a higher contribution of RM7.8 million in 2018 mainly due to profits recognised upon finalisation of the Extended In-Service Support 2 submarines contract with the Royal Malaysian Navy.

“The contribution of RM11.4 million from the JVs in the same corresponding period last year was from the revision in the project cost under defence related MRO projects and good progress of the Littoral Combat Ship project undertaken by the Contraves Advanced Devices Sdn Bhd group,” the group said.

Its energy segment did not have any new projects other than the Belum Topside project, which was completed in October 2018.

At market close last Friday, BHIC’s share price was up three sen at RM1.35, making its market capitalisation RM335.42 million.