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KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd
(MMHE) remains cautious on the outlook for the industry despite returning to the black with earnings of RM48.13mil in its fourth quarter ended Dec 31, 2017.
It said that while oil prices have risen steadily over recent months, sustainability of the prices will depend on oil producers staying committed to production cuts.
It also said that there is still uncertainty as to the industry's capital spending.
"MMHE will continue its efforts on cost management and resource optimisation and is committed to its key strategies including strengthening its position in existing markets as well as expanding into new markets.
"The group had during the year secured a number of offshore fabrication projects which are expected to contribute positively to the Group's revenue in 2018 and beyond," it said.
MMHE's latest quarterly result brought the group's full-year earnings to RM34.23mil, compared to a net loss of RM134.3mil previously.
The fourth quarter results were a significant improvement over the net loss of RM120mil in the corresponding year-ago quarter, owing to a provision of asset impairment in the year-ago quarter and higher operating profit.
For the full year, the group posted a 9% higher operating profit of RM14.3mil against the previous year's profit of RM13.1mil despite 20% lower revenue of RM956.4mil.
The group's heavy engineering division recorded 21% lower revenue of RM591.3mil in FY2017 as revenue for new projects will mainly be recognised in 2018 onwards.
However, operating loss declined to RM36.7mil from RM107.7mil previously due to recognition of change orders and finalisation of completed projects in the current year.
The marine division also suffered falling revenue of 18% to RM365.1mil due to lower contract values and vessel repairs. Operating profit for the segment dropped accordingly to RM52.8mil from RM88.5mil in the prior year.
For its joint ventures, the group's share of loss was reduced to RM3.2mil from RM7.6mil due to the reversal of cost provisions in the current year.
The group has declared an interim dividend of three sen per share with entitlement and payment dates on Feb 23 and March 8, 2018, respectively.
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