KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd
(MMHE), which posted another profitable quarter in the closing months of 2022, says it is cautiously optimistic on the outlook of its heavy engineering segment while challenges remain to its marine business.
In the fourth quarter ended Dec 31, 2022, MMHE posted a net profit of RM27.14mil, representing an earnings per share of 1.7 sen, as compared with a net loss of RM107.79mil or loss per share of 6.7 sen in the previous corresponding quarter.
Revenue in the quarter under review was slightly lower at RM424mil compared with RM432.01mil.
For the full year, the group's recorded a net profit of RM67.77mil, in comparison to a net loss of RM270.41mil in FY21.
The group reported revenue of RM1.65bil in 2022, up from RM1.47bil in the previous year.
In line with its performance, the group declared a dividend of 1.5 sen per share, going ex on Feb 24, 2023, and payable on March 23, 2023.
Commenting on its prospects, the oil and gas and marine integrated solutions company said the reopening of China's economy is expected to significantly boost demand for oil, gas and energy.
"On another front, the rapid growth of renewable energy alongside the increasing decarbonisation efforts globally could present multiple business opportunities to the group," it said in a filing with Bursa Malaysia.
With regards to downside risk, the group noted that there remains a threat of global economic recession while supply chain disruptions and high inflationary pressures could continue to pose challenges to the heavy engineering business.
In the marine segment, MMHE said the lifting of entry restrictions on foreign technical specialists since April 2022 has benefited the business operations through higher dry-docking activities.
The group also plans to capture more upgrading and retrofitting jobs as vessel owners aim to comply with the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) imposed by the International Maritime Organisation (IMO) from Jan 1, 2023 onwards.
"However, despite recent improvements in the labour market which had supported the Marine business' turnaround, the prevailing nationwide manpower constraints may still affect the timely execution of dry-docking works.
"In addition, the recent lifting of China’s border restrictions could lead to tougher competition amongst shipyards for dry-docking opportunities moving forward," said MMHE.
