PETALING JAYA: Oil and gas (O&G) services provider Deleum Bhd
, which saw its first-half (1H26) earnings hit by weaker activity and operatorship transitions, expects business activity to improve in 2H26 as delayed maintenance work starts to pick up.
Its group chief executive officer Ramanrao Abdullah said around 80% of the group’s business is linked to maintenance, repair and overhaul (MRO) activities, with some customers pushing back turnaround activities as they continue to operate their assets while crude oil prices remain high.
However, the maintenance work remains within the required timeframe.
He said the timing of some projects was also affected as several upstream assets changed hands and new operators took over.
“Some (projects) will fall into the second half, and some of it will go into 2027,” Ramanrao told StarBiz when asked whether some activities had been pushed into 2H26.
This comes as Deleum’s second quarter ended June 30, 2026 (2Q26) net profit fell 47.2% to RM10.34mil, from RM19.59mil a year earlier, while revenue declined 19.2% to RM191.49mil from RM236.88mil.
For 1H26, its revenue fell 9.6% to RM376.42mil from RM416.3mil in 1H25, while net profit declined 39.7% to RM19.3mil from RM31.99mil.
Earnings per share stood at 4.81 sen in 1H26, compared with 7.97 sen previously.
The weaker performance was mainly due to delays in customer activities and project execution, including maintenance work and operatorship changes.
In June, Petroliam Nasional Bhd (PETRONAS) announced that UK-listed EnQuest plc would assume operatorship and participating interests in the Balingian, SK8 and D35 production sharing contracts (PSCs), while also taking a non-operating interest in the PM6/12 PSC.
Separately, Searah Ltd, the 50:50 upstream joint venture between PETRONAS and Italy’s Eni SpA, assumed operatorship of five Malaysian upstream assets from PETRONAS Carigali Sdn Bhd effective July 1.
The Malaysian assets form part of Searah’s wider portfolio of 19 assets across Malaysia and Indonesia.
Meanwhile, Delum said the shift towards lower-margin sales in both its power and machinery and oilfield integrated services segments also weighed on earnings.
Looking ahead however, Ramanrao said the company’s RM2.4bil order book continues to provide visibility for business execution amid the evolving operating environment.
He said while operatorship changes had temporarily affected activity levels, conditions were expected to progressively normalise as the handover processes advanced.
“With our RM2.4bil order book, strong financial position and established capabilities, Deleum remains focused on project execution and capturing opportunities arising from ongoing production optimisation, maintenance and asset enhancement activities,” he said.
Deleum declared an interim dividend of 3.5 sen per share for 1H26, compared with four sen per share in the corresponding period a year earlier.
AmInvestment Bank Research has maintained its “buy” rating on the company but with a lower target price of RM1.30 a share (from RM1.60), pegged to an unchanged eight times FY27 price earnings multiple.
It noted following the sharp 1H26 margin compression seen at Deleum, it believes a sustained earnings recovery will depend not only on higher activity but also on better operating leverage and margin normalisation.
