PETALING JAYA: Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) has bagged an engineering contract worth RM1bil from Petronas Carigali Sdn Bhd for the Bokor Phase 3 redevelopment project off Sarawak.
In a filing with Bursa Malaysia yesterday, MMHE said the contract was awarded to its wholly owned subsidiary, Malaysia Marine and Heavy Engineering Sdn Bhd, and would involve the engineering, procurement, construction, installation and commissioning of the project’s central processing platform (CPP).
The company said the first steel cut is expected to commence in the third quarter of 2018 and scheduled to be completed in the middle of the second quarter of 2020.
“Upon completion, the new CPP will be installed at the Bokor field located in Baram Delta, offshore Sarawak, in a water depth of 70 metres.”
MMHE said the project was awarded after going through a competitive bidding process.
“Hence, the award of this project is a reflection of MMHE’s improved competitiveness, thanks to a number of implemented cost-cutting strategies and efficiency initiatives combined with strong management focus on the heavy engineering business.”
The company said the contract is expected to contribute positively to its future earnings.
MMHE fell into the red for the financial year ended Dec 31, 2016, posting a net loss of RM134.3mil.
The losses were mainly due to lower contributions from the heavy engineering segment, net foreign-exchange losses compared to gains in the previous year, and the impact from the recognition of a higher impairment on assets in the current year.
Revenue for the year plunged 51.5% to RM1.19bil.
In its filing accompanying its full-year results, the company said an operating loss of RM107.7mil was recorded compared with a RM9.2mil profit a year ago, mainly due to insufficient revenue and contribution to absorb the group’s overhead.
For the fourth quarter, MMHE recorded a net loss of RM119.7mil compared with a net loss of RM27.1mil during the same period a year ago.
Operating profit fell to RM18.7mil against RM50.4mil a year ago, while revenue for the quarter fell 57.9% to RM303.6mil.
Revenue from the heavy engineering segment for the quarter fell by 72% on the back of fewer and a lower backlog and order intake, which, in turn, resulted in an operating loss of RM34.4mil.
The marine segment’s revenue and operating profit, however, were higher from a year ago, mainly due to the higher value of vessels repaired from liquefied natural gas and floating production, storage and offloading conversion works in the current quarter.
It recorded losses per share of 7.5 sen for the quarter and 8.4 sen for the full year.
On its prospects, MMHE said although an agreement was reached by the Organisation of the Petroleum Exporting Countries (Opec) and non-Opec members to reduce output from Jan 1, 2017, the commitment to honour this pact remains to be seen.