The group said it aims to advance its growth by capitalising on the opportunities in both conventional and new energy sectors.
PETALING JAYA: Malaysia Marine & Heavy Engineering Holdings Bhd
(MMHE), which returned to the black for the third quarter ended Sept 30, 2024 (3Q24), is focused on improving its contracting strategies through risk-sharing arrangements such as alliance concept, reimbursable or cost-plus basis.
It said this was in response to challenging market conditions, such as geopolitical conflicts that are likely to continue affecting the supply chain, leading to price escalations and volatile operating landscapes.
For the heavy engineering segment, the group said upstream capital expenditure spending is expected to remain stable amid ongoing energy security concerns and geopolitical conflicts, which will create opportunities for the group.
The group added that it aims to advance its growth by capitalising on the opportunities in both conventional and new energy sectors.
Meanwhile, the marine segment aims to expand its conversion portfolio given the uptick in upstream activities.
“The rapid expansion of the liquefied natural gas (LNG) fleet would also benefit the group in repair and maintenance services, though this may be offset by the expected deferment of LNG carrier dry-docking to meet robust demand in the upcoming winter.
“Nevertheless, the group foresees stiff competition to persist in the marine business with the Chinese and neighbouring yards,” it said in its outlook accompanying its results filing with Bursa Malaysia.In 3Q24, the group posted a net profit of RM15.27mil, against a net loss of RM105.21mil in the year-ago quarter, which translates to an earnings per share of one sen against a loss per share of 6.6 sen.
The group reported revenue of RM906.46mil during the quarter compared to RM638.47mil in 3Q23, due to higher revenue from the marine and heavy engineering segments.
MMHE said the heavy engineering segment recorded revenue of RM799.9mil, higher by RM229.7mil from RM570.2mil in the previous corresponding quarter.
“The increase in revenue was primarily due to higher contributions from ongoing projects.”
MMHE said the segment achieved an operating profit of RM19.5mil in the quarter under review, compared to an operating loss of RM107.7mil in the previous corresponding quarter.
“The operating profit was mainly due to project close-out and the favourable impact from project hedging.
“The operating loss suffered in the corresponding quarter was mainly attributed to additional cost provisions from price escalation impact on ongoing projects.”
As for the marine segment, MMHE said revenue of RM106.5mil in the quarter was RM38.3mil higher compared to RM68.2mil in the previous corresponding period, as a result of higher dry-docking and repair services.
“In tandem with the higher revenue, the segment posted an operating profit of RM11mil during the current quarter, RM6.6mil higher compared to an operating profit of RM4.4mil in the previous corresponding quarter,” it said.
For the nine-month period to Sept 30, 2024, the group said net profit was RM99.61mil as compared to a net loss of RM490.37mil, while revenue rose to RM2.79bil from RM2.19bil in the year-ago period.
Going forward, MMHE said current geopolitical conflicts are likely to continue affecting the supply chain, leading to price escalations and volatile operating landscapes.
“The group remains focused on improving its contracting strategies through a risk sharing arrangement such as alliance concept, reimbursable or cost-plus basis, in response to these challenging market conditions.”
