MMHE narrows losses to RM4.66m in 3Q FY19, cautious on outlook


MMHE managing director and CEO Wan Mashitah Wan Abdullah Sani said: “Despite improvement in the current quarter performance against the preceding quarter, the short term overall outlook remains uncertain in view of intensifying geopolitical tensions, slowing global economic growth, sluggish oil demand and the ongoing unresolved US-China trade conflict.

KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) narrowed its net losses to RM4.66mil in the third quarter ended Sept 30,2019 from RM22.72mil a year ago but it remained cautious on the outlook due to the volatile geopolitical issues.

It announced on Thursday its revenue was lower at RM254.34mil, down 12.2% from RM289.80mil. Loss per share was 0.29 sen compaed with 1.42 sen.

In the nine months ended Sept 30, its net losses were also reduced to RM43.50mil compared wth RM97.47mil in the previous corresponding period.

Its revenue however increased by 4.6% to RM733.90mil from RM701.11mil.

MMHE said the heavy engineering segment's revenue rose slightly to RM430.1mil from RM427.4mil. However, it posted higher operating loss of RM50.4mil from RM40.6mil mainly due to lower contribution from post sail away projects.

During the nine months, the heavy engineering segment completed/sailed away several structures/projects for its clients.

It constructed and commissioned steel structure, piping, mechanical equipment, electrical and instrumentation erection, insulation and painting works for the Refinery and Petrochemical Integrated Development (RAPID) project Package 14.

It also completed the electro-mechanical works for RAPID Package 3 Area 2 for Tecnicas Reunidas Malaysia Sdn Bhd; fabrication of Gumusut-Kakap Phase II extension subsea manifold for TechnipFMC and; Tembikai Non-Associated Gas (NAG) Development.

“The ongoing projects for the heavy engineering segment include the engineering, procurement, construction, installation and commissioning (EPCIC) of the centralised processing platform (CPP) for Bokor phase three redevelopment project, Pluto water Hhandling module project, and EPCIC works for the Kasawari Gas Development project.

As for the marine segment, revenue rose to RM303.8mil from RM273.7mil mainly due to higher revenue from dry docking services on LNG carriers.

“The segment recorded an operating profit of RM3.2million against operating loss of RM48.8mil in the corresponding period due to higher contribution from conversion work as well as dry docking services on LNG carriers in the current period, ” it said.

For the nine months period, the marine segment completed the repair and maintenance of 59 vessels of various categories, of which 16 were repairs on LNG carriers.

On the outlook, MMHE managing director and CEO Wan Mashitah Wan Abdullah Sani said: “Despite improvement in the current quarter performance against the preceding quarter, the short term overall outlook remains uncertain in view of intensifying geopolitical tensions, slowing global economic growth, sluggish oil demand and the ongoing unresolved US-China trade conflict.

“We remain vigilant on the outlook for the heavy engineering business in the near term due to the uncertainty on the timing of capital spending by major oil and gas players.

“The outlook for the marine business is expected to remain challenging as shipyards strive to capture opportunities in order to maximise utilisation amidst stiff competition in a volatile market, ” she said.

Wan Mashitah said although prospects for upgrading and retrofitting jobs are expected to improve in light of the forthcoming IMO2020 sulphur cap implementation, some shipowners are considering to reduce their dry docking repair costs in the current volatile market.

“We are cautiously optimistic on the recovery of the industry should there be a resolution of the trade dispute currently impacting the global economy.

“We shall continue to focus on replenishing our order book in various geographical areas as well as diversifying into new businesses. Improving profitability remains our priority by continuously exercising cost optimisation efforts and ensuring quality and timely deliverable of projects.”

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