THHE upbeat about on-going jobs, expects projects to boost revenue by 20%

  • Business
  • Thursday, 12 Jun 2014

KUALA LUMPUR: TH Heavy Engineering Bhd (THHE) expects on-going jobs to boost its revenue by as much as 20% for its current financial year ending Dec 31.

The company currently has an order book of RM300mil that should last until the middle of next month, its managing director and chief executive officer Nor Badli Mohd Alias said.

“Our topline last year was over RM250mil. This year we are looking at an improvement of between 10% and 20% based on the existing work that we have,” he said after the company AGM yesterday.

“The game changer is when our floating production, storage and offloading vessel (FPSO) business kicks in by 2016,” Nor Badli added.

THHE secured a FPSO contract last month from Japan’s JX Nippon Oil & Gas Exploration in a deal worth US$900mil (RM2.9bil).

Nor Badli also said the company was tendering for six fabrication jobs worth RM3bil.

“The last two to three tenders didn’t go our way so we’re keeping our fingers crossed. We usually have a success rate of between 15% and 20% when bidding for tenders.”

He added that the company was allocating capital expenditure (capex) totalling RM90mil and RM745mil for its yard expansion and FPSO business respectively.

Chairman Datuk Azizan Abd Rahman said THHE may raise funds for the capex.

“There are various options we’re looking at. We’re looking at capital markets also. We’re toying with the best capital raising exercise,” he said, adding that the company currently had no plans of doubling its earnings per share (EPS).

A research house in a report earlier this year said THHE could double its EPS in anticipation of higher utilisation of its fabrication yard.

For its first quarter ended March 31, the company’s net profit slipped to RM1.73mil from RM6.02mil in the previous corresponding period mainly due to lower realised margins, while revenue increased to RM142.11mil from RM56.08mil previously.

Basic earnings per share slipped to 17 sen from 78 sen a year earlier.

On a separate note, Azizan declined to comment on the emergence of Tan Sri Quek Leng Chan, the major shareholder of the Hong Leong group, as a 10% shareholder of THHE last May.

Quek, via GuoLine Capital Ltd (GCL), bought 92.79 million shares in THHE via a private placement for RM41.8mil last May. Part of that was directly through his youngest son Quek Kon Sean, who will subscribe to 27.8 million shares. GCL is a unit of Quek’s flagship Hong Leong Co (M) Bhd.

Azizan added that there were no immediate plans to appoint Kok Sean onto the board of THHE.

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