MHB posts loss of RM23.9m

by NUR HANANI AZMAN / graphic by TMR

MALAYSIA Marine and Heavy Engineering Holdings Bhd (MHB) posted a net loss of RM23.88 million for the third quarter ended Sept 30, 2021 (3Q21), against a net profit of RM2.64 million in 3Q20 mainly due to the lower contribution from post-sailaway projects.

Revenue for the period strengthened to RM389.29 million compared to RM369.46 million in 3Q20, due to higher revenue from its heavy engineering segment, although this was partially offset by the lower revenue from its marine segment.

MHB recorded a loss per share of 1.5 sen for the quarter versus earnings of 0.2 sen per share in 3Q20, its filing to Bursa Malaysia yesterday showed.

In a statement, MHB MD and CEO Pandai Othman stated that although energy prices have been rising due to increase in demand as key economies continue to reopen and recover from the Covid-19 pandemic, this might not translate to higher spending by resource companies.

“Concerns remain on a potential fourth global wave of infections which could disrupt progress of the recovery. This uncertainty coupled with high steel prices is expected to continue to result in modest spending by oil majors.

“As such, we remain cautious on the prospects for the heavy engineering segment during the remainder of the year,” he stated.

Until international borders reopen, foreign clients are likely to continue to send their vessels to shipyards in countries with more relaxed border restrictions, said Pandai on the company’s marine segment prospects.

He added that liquefied natural gas (LNG) demand from Far East consumers is expected to remain high during the upcoming winter despite the global gas price hike and the high level of LNG trade will result in more LNG vessel owners deferring dry-docking activities.

“This would in turn lead to greater competition amongst shipyards for the limited dry-docking opportunities, as such, we expect the marine business to remain challenging.

“We aim to replenish our order book through diversifying into new segments and new regions. Ongoing efforts on cost management, safe execution and timely delivery of ongoing projects remain key priorities,” he added.

For the nine months period ended Sept 30, MHB achieved a revenue of RM1 billion and a pre-tax loss of RM162.61 million.

The group’s heavy engineering segment reported a higher revenue of RM863.5 million compared to RM609.7 million in the prior period mainly due to higher revenue from an on-going project while the prior period was impacted by the yard shutdown during last year Movement Control Order.

The segment registered a higher operating loss of RM118.6 million against an operating loss of RM68.3 million in the prior period mainly contributed by additional cost provisions recognised for an on-going project during the current period.

The marine segment registered a lower revenue of RM171.8 million compared to RM261.5 million in the prior period.

This was mainly due to lower number of liquefied petroleum gas repair and the absence of conversion work in the current period coupled with prolonged border restrictions imposed by the government due to the Covid-19 pandemic.

In tandem with the lower revenue, the segment recorded a higher operating loss of RM31.7 million against an operating loss of RM30.3 million in the prior period.

For the nine months period, the marine segment completed the repair and maintenance of 73 vessels of various categories, of which 10 were repair works on LNG carriers.

The group’s total assets and total equity at the end of the period under review stood at RM3 billion and RM1.8 billion, respectively.