KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) is bidding for projects totalling at least RM4bil and expects cashflow to be “steady” until next year, said chairman Datuk Nasarudin Md Idris.
“Our orderbook as at March 31 is RM2.4bil, which does not include the Kebabangan project that we are still finalising with Kebabangan Petroleum Operating Co.
“The contracts that we secure will replenish our orderbook. Nevertheless there is visibility until 2013 (in relation to) our outstanding orderbook, which provides us a steady cashflow until 2013,” he said.
Nasarudin said MMHE had bid for various projects locally and overseas.
“We are poised to possibly undertake more deepwater projects that are of greater complexity, bigger scope and higher values. We have done a lot for upgrading in relation to our yard optimisation programme to enable us to undertake such projects,” he said.
MMHE, which is a subsidiary of MISC Bhd, planned to spend RM1.9bil in capital expenditure (capex), mainly for its yard optimisation programme, over the next four years.
“We have so far invested RM774mil from our master budget of RM2.7bil. Since we now have two yards, we will not be investing in both yards (for the RM1.9bil capex).
“We cannot spend this capex merrily. It must be worthwhile, make economic sense and enhance our efficiency,” Nasarudin said, adding that capex allocation for this year was about RM304mil.
MMHE will also get an “investment tax allowance” from the Government for capex spent on projects from 2006-2016.
“A good portion of it in terms of tax credits from this investment tax allowance (was noticed) in the accounts in the previous years.
“But in last year's accounts, we don't see any tax credits a very small amount because a lot of these yard optimisation projects have not yet been capitalised and entered into our books,” he said.
“Once it is capitalised, we will have the benefit of the allowance. The more we invest, there will be greater benefits from the allowance. I have to stress here that we will spend judiciously and not just for the sake of the investment tax allowance,” he added.
Meanwhile, Nasarudin said profits from the company's ongoing projects would only be recognised after their completion reached 25%.
“The new projects will be Tapis enhanced oil recovery, Telok and the (floating production, storage and offloading unit) Cendor.
“We are still completing the Gumusut-Kakap project,” he said.
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