MMHE posts Q3 earnings of RM16.4m on lower heavy engineering losses

MMHE's shipyard

KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) posted earnings of RM16.4mil in the third quarter ended Sept 30, 2017 while the heavy engineering segment's losses narrowed sharply from a year ago. 

It reported on Tuesday the turnaround was in contrast with the net loss of RM4.53mil a year ago. Its operating profit was RM17.08mil compared with operating loss of RM1.65mil a year ago.

Revenue declined 35.4% to RM 215.35mil from RM333.49mil. Earnings per share were one sen compared with loss per share of 0.3 sen.

MMHE explained the heavy engineering segment, which comprises mainly offshore and onshore oil and gas works, said revenue fell 47% to RM117.6mil from RM219.7mil a year ago.

The factors were mainly due to a lower backlog following completion of offshore projects in FY17 while ongoing onshore projects in the current quarter are nearing completion.
 
MMHE saw its operating losses narrowing to RM1.179mil from RM21.56mil a year ago mainly from finalisation of completed projects in the current quarter.

Its marine division's operating profit slipped to RM16.98mil from RM19.89mil on lower revenue mainly due to the lower value and number of vessels repaired.

For the nine months, its net losses were RM13.89mil compared with RM14.63mil in the previous corresponding period. Revenue fell 20.1% to RM708.46mil from RM887.65mil.

MMHE said heavy enngineering's revenue of RM429mil was 25% lower the RM573.9mil a year ago.

“The decrease is mainly due to completion of offshore projects in the current period while newly secured projects are still at early stages. 

“Notwithstanding the lower revenue, the segment posted a lower operating loss of RM48.3mil from RM73.3mil loss in the corresponding period, mainly from recognition of change orders and finalisation of completed projects in the current period,” it said.

As for its marine division's revenue, it fell 11% to RM279.40mil from  RM313.8mil a year ago, mainly due to lower contract value and number of LNG vessels repaired.

“Marine's operating profit of RM40.7mil was RM1.6mil higher than the corresponding period, mainly due to recognition of approved change orders from on-going conversion projects,” it said.