Malaysia Marine and Heavy Engineering yard - MISC
KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd
(MMHE), which got a major boost this month when Petronas Carigali awarded it a contract valued almost as high as its entire 2016 revenue, continued to struggle in the first quarter (Q1) of 2017 with a loss of RM16.61mil.
The loss was more than double that incurred in the corresponding period of last year (RM7.58mil), according to the oil and gas service provider’s latest quarterly financial report to Bursa Malaysia.
Revenue, meanwhile, slipped 8% to RM235.84mil.
MMHE’s bottom line figure has been on a declining trend in the last four years, finally sinking into a net loss in the financial year ended Dec 31, 2016 (FY16).
The MISC Bhd subsidiary, whose ultimate shareholder is Petroliam Nasional Bhd, has struggled over the past two years due to the scarcity of new major offshore projects arising from the weak oil and gas sector. It posted a net loss of RM134mil in FY16 on the back of a 52% lower revenue of RM1.19bil.
In Q1 FY17, MMHE’s operating loss widened to RM15.6mil from RM3.5mil a year earlier.
The heavy engineering division reduced its operating loss to RM24.06mil from RM26.14mil, but it was not enough to offset the 38%, or RM5.66mil, drop in marine division’s profit to RM9.36mil.
“The contraction (in marine’s revenue) was mainly due to one-off settlement of prior years’ projects in the corresponding quarter. Excluding the one-off settlement, the division would have recorded higher revenue compared to the corresponding quarter,” MMHE said in a press statement.
The “others” segment also swung to a RM282,000 loss from a profit of RM7.96mil previously.
It should be noted that the first steel cut for the RM1bil engineering, procurement, construction, installation and commissioning (EPCIC) contract awarded earlier this month by Petronas Carigali is scheduled to start only in Q3 next year.
MMHE managing director and chief executive officer Wan Mashitah Wan Abdullah Sani gave a cautious remark on the company’s current-year prospects.
“While crude oil prices have generally improved in recent months as a result of reduction in oil output since the start of the year, the outlook remains uncertain,” she said in the press statement.
“Deferment and scale-down of upstream projects is expected to prolong and continue to pose challenges to the industry for the major part of the year.”
Wan Mashitah said the group remained committed to its strategy in managing cost, optimising its resources and improving operational efficiency in line with the challenging environment.
“Effort to replenish orderbook from the onshore segment, hook-up & commissioning, facilities improvement and the marine segment are progressing and remain an ongoing priority,” she added.
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