MHB’s earnings suffered in 4Q20 despite higher revenue

By NUR HAZIQAH A MALEK

MALAYSIA Marine and Heavy Engineering Holdings Bhd (MHB) foresees the recovery in global oil market prices to be weighed down by renewed lockdowns in several major oil-importing countries.

MHB MD and CEO Pandai Othman said the company remains cautious on the prospects of its orderbook replenishment in view of uncertainties surrounding the timing of capital spending by oil majors.

He noted that the liquefied natural gas (LNG) demand and trade have been on the rise to meet higher LNG demand from Far East importers due to the pro-longed winter leading many LNG vessels to be mobilised.

Currently, shipowners are inclined to opt for dry docking in countries with more relaxed border restriction regulations, which further increase scarcity in dry-docking opportunities and thus create stiff competition.

“Once the industry recovers, our new fully operational Dry Dock No 3 would provide the advantage of offering more flexible dry docking windows to shipowners. Until then, we expect the marine business to remain challenging,” Pan- dai stated in an exchange filing yesterday.

For the fourth quarter ended Dec 31, 2020, the group posted a net loss of RM8.5 million against a net profit of RM9.27 million posted in the same quarter in the preceding year due to higher operating losses in the heavy engineering segment.

Revenue climbed to RM695.5 million in the quarter, an increase of RM419.9 million over the RM275.6 million it made in the corresponding quarter mainly due to higher revenue from the heavy engineering segment.

At the operating profit level, the group recorded a loss of RM8.1 million compared to profit of RM1.6 million in the corresponding period.

For the full year, the group has achieved revenue of RM1.6 billion.

The group’s heavy engineering segment recorded a revenue of RM594.8 million, an increase of RM446.3 million from RM148.5 million it reported in the corresponding quarter, mainly due to increased activities in ongoing projects.

Its marine segment posted RM100.7 million revenue in the quarter compared to RM127.1 million in the corresponding quarter mainly due to lower number of vessels secured for repair and maintenance as the segment has not fully recovered from the Covid-19 pandemic impact.

The group’s total assets and equity at the end of the period under review stood at RM3.1 billion and RM2 billion respectively.

For the year under review, the group’s heavy engineering segment has completed various projects, namely the floating production storage and offloading including the Golden Star external turret for Promor Pte Ltd; Bokor Phase 3 re-development project central processing platform for Petronas Carigali Sdn Bhd; Bergading Mercury removal unit module under Bergading central processing platform — mercury removal unit integration project for Hess Exploration and Production Malaysia BV; and the Pluto water handling module for TechnipFMC plc.

Other ongoing projects for the segment includes the engineering, procurement, construction, installation and commissioning works for the Kasawari gas development project, as well as similar works for the Bekok Oil project.