Page 17 - Malaysia Marine & Offshore Industries Directory 2019/2020
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                 its fairly sizeable order book of RM3 billion, which would last them until 2023.
Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) slipped into the red with a net loss of RM122.69 million in the year ended December 31, 2018 (FY18) from a net profit of RM34.23 million a year ago. It attributed the net loss to the widened loss of its marine and engineering divisions. MMHE’s FY18 revenue increased 1.88% to RM974.35 million from RM956.41 million in the same period a year ago due to significant drop in revenue following lower conversion works and dry docking activities. For the fourth-quarter, the company recorded a net loss of RM25.22 million against a net profit of RM48.13 million a year ago, while revenue increased 10.2% to RM273.24 million from RM247.95 million.
MMHE said it would remain prudent on the outlook for the industry in the near term given the uncertainties surrounding timing of capital spending by major O&G players. It expects the outlook for marine business to remain positive as global liquefied natural gas trade is projected to expand firmly driven by increase of exports from the US and Australia to Asia. The group had during the year secured a number of long term offshore fabrication frame agreements which are on call-out basis including the long term agreement signed with Saudi Arabian oil company, Saudi Aramco. These are expected to contribute positively to group revenue in 2019 and beyond. MMHE also remains committed to replenish its orderbook in various geographical areas.
Wah Seong Corp Bhd reported its first loss-making quarter in two years as contributions from its O&G and renewable energy segments declined, while its industrial trading and services business sank into losses. It posted a net loss of RM9.98 million for the fourth quarter ended December 31, 2018 (4QFY18) against a net profit of RM65.96 million in the previous corresponding quarter. Revenue declined 27.86% to RM706.37 million from RM979.2 million.
Its O&G segment’s profit before tax declined to RM6.9 million from RM64 million during the quarter. Excluding one-off items arising from the gain on sales and leaseback of land offset by impairment of certain idle assets, the segment would record a profit before tax of RM36.6 million. Its renewable energy’s profit before tax retreated to RM7.3 million from RM12.1 million due to compression in profit margins on revenue from equipment fabrication and steam turbines’ business. Its industrial trading and services segment recorded a loss before tax of RM2.9 million versus a profit before tax of RM0.4 million a year ago, due to lower profit margins and higher expenses in the construction equipment and power generation businesses as well as its building materials business.
For the Full Year (FY18), its net profit was down 42.67% to RM64.8 million from RM113.02 million in FY17, despite revenue climbing 18.82% to RM2.96 billion from RM2.49 billion. This is as its O&G segment’s profit before tax declined to RM105.8 million from RM132 million a year ago, which was partly mitigated by the marginally higher profit before tax of RM30.7 million versus RM29.5 million in the renewable energy segment, and the profit before tax of RM7.1 million versus a loss before tax of RM0.5 million in its industrial trading and services segment.
On prospects, Wah Seong said the outlook for profits should improve in the course of the year, as it is seeing an upturn in tendering as well as preparatory activities by O&G majors for a number of prospective projects, which are expected to convert into firm bids in the near term with awards taking place in the next six to 18 months. Its order book now stands at RM1.1 billion, comprising RM774.2 million in the O&G segment, RM283.3 million in the renewable energy segment and RM54.4 million in the industrial trading and services segment.
MALAYSIA MARINE & OFFSHORE INDUSTRIES DIRECTORY 2019/2020
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