KUALA LUMPUR: Boustead Heavy Industries
Corporation Bhd’s (BHIC) top priority will continue to be servicing the Royal Malaysian Navy for ship building, repair and maintenance over the next five years, said its chairman Tan Sri Lodin Wok Kamaruddin.
Currently, Lodin said that around 80% of BHIC’s revenue came from its contracts from the Malaysian armed forces, adding that another 20% was from the commercial sector.
He said BHIC would probably aim for a 70:30 revenue contribution from the military and commercial sectors respectively over the next four to five years.
“But the number one priority is still the Malaysian navy. The focus will be on making sure we give the best possible service with the highest level quality. Then, we can make sure our shores are well-protected,” he told reporters after the company’s 43rd annual general meeting yesterday.
Lodin noted that its shipyards would be kept busy for the next five to six years following the RM9bil contract awarded to its associate company Boustead Naval Shipyard Sdn Bhd (BNS) last year to build six littoral combat ships (LCS).
BHIC executive deputy chairman and managing director Tan Sri Ahmad Ramli Mohd Nor said that the group had ended 2014 in an improved financial position and is set to build value in its existing business and broaden its reach in the services sector.
He said that the BHIC transformation programme was bearing fruit and that the group was well-positioned for growth.
“We faced a tough year but managed to deliver results owing to enhanced productivity, coupled with sound improvements in capabilities and processes,” he said.
He added that progress made from finalising the RM9bil LCS contract saw strengthened earnings for BNS, which also contributed to BHIC’s earnings.
Last month, BHIC had also secured an extension of its in-service support (ISS) contract worth RM532.1mil from the Government for two units of Prime Minister’s class submarines for the navy.
Ahmad Ramli said that this would allow the group to continue maintenance of the two submarines proir to their refit, with the first due to commence by this year end.
Under its commercial division, he said that the first-in-class, multifunctional 17-metre tugboat was expected to be delivered in April 2015. It is highly automated and requires a crew of just two.
“This project is very much in line with our strategic approach of building a niche in smaller vessels and we are already targeting several commercial new-build projects,” he said.
He added that it would also be delivering the Belum topside project for Murphy Oil at about the same time, adding that the enhancement of its oil and gas infrastructure was an import part of its future strategy.
Looking ahead, Ahmad Ramli said that the current financial year would see it continuing to be committed to stringent cost control measures.
“Despite challenges, the group is optimistic about delivering satisfactory results for our shareholders given positive factors such as our stable base of operations, steady increase in new business and focused leadership,” he said.
BHIC narrowed its net loss to RM4.5mil for its fourth quarter ended Dec 31, 2014, from a net loss of RM28.1mil a year earlier. It posted full-year net profit and revenue of RM17.9mil and RM332.8mil.