MMHE records net loss of RM105.21mil in 3Q

KUALA LUMPUR: As Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) navigates a challenging operating environment, tighter global oil supply and higher prices amid growing global demand could bolster capex spending beyond pre-pandemic levels, said managing director and CEO Pandai Othman.

Reviewing the third-quarter results and outlook for the energy and marine solutions provider, Pandai said this was owing to the recent conflict in the Middle East as well as the ongoing commitment by Opec+ to reduce global oil supply.

Meanwhile, he noted that there are also business opportunities in the renewable energy space, as environmental, social and governance (ESG) initiatives continue to gain in significance.

"We will continue to explore opportunities in both domestic and international markets with increased emphasis on decarbonisation and renewable energy," he said in a statement.

In the third quarter of 2023, MMHE posted a net loss of RM105.21mil, which compares to a net profit of RM15.95mil in the same quarter in 2022.

The group recorded a loss per share of 6.6 sen as compared to an earnings per share of one sen in 3QFY22.

Revenue, however, was up to RM638.47mil compared to RM409.23mil previously due to contributions from new and ongoing projects.

For the nine-months period ended Sept 30, 2023, MMHE recorded a net loss of RM490.37mil versus a net profit of RM40.63mil in the same period in 2022, while revenue rose to RM2.19bil from RM1.23bil in the comparative period.

MMHE continued to face headwinds to the completion of projects in its heavy engineering segment, leading to an operating loss of RM506.5mil due mainly to additional cost provision as a result of revised schedules and price escalation.

"The revised schedule has caused the extension of delivery dates of the ongoing projects, which was necessary to cater for the delayed onshore works," it said.

For the marine segment, operating profit in the period under review fell to RM20.4mil from RM39.6mil previously, with the higher profit in the earlier period mainly contributed by the recovery of doubtful debts.

The group said its total assets and total equity at the end of the period under review stood at RM3.4bil and RM1.2bil, respectively.