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Alam Maritim sinks to $3m loss in H1

Alam Maritim sinks to $3m loss in H1
Malaysian offshore services group Alam Maritim Resources turned to a MYR12.1m ($3.0m) net loss in the first half as turnover fell 14% to MYR131.5m from MYR153.3m previously.

Revenue from the key offshore support vessels (OSV) segment fell 22% to MYR68.4m from MYR87.3m previously due to lower average utilisation rate, the company said in a stock market announcement.

Meanwhile revenue from the subsea services/offshore installation & construction (OIC) segment fell by a smaller 6.5% from MYR62.8m to MYR58.7m mainly due to lower contributions from subsea projects.

As a result, both segments turned in losses at the pre-tax level, with the OSV segment losing MYR6.7m and the OIC segment losing MYR8.1m. This was mainly due to losses suffered by associates and jointly controlled entities, and unrealised foreign exchange losses for the OSV segment and lower revenue and contribution margin for the subsea/OIC segment Alam Maritim said.

The results for the most recent second quarter alone however look slightly brighter, with revenue actually rising 4% to MYR82.8m from MYR79.6m previously. Second quarter net profit however fell 30% to MYR7.1m from MYR10.1m previously.

The company also acknowledged the fact that it has some exposure to Swiber Holdings and its associated debts. Through its Labuan unit, Alam Maritim (L) Inc the company has exposure through providing corporate guarantees on a proportionate basis (50%) for credit facilities totalling MYR154.0m granted by Ambank Group to its jointly controlled entity, Alam Swiber DLB 1 (L) Inc.

The same Labuan entity has also provided corporate guarantees on a proportionate basis (51%) amounting to $24.5m for the credit facilitiesgranted by Oversea-Chinese Banking Corp Limited to MDSV I (L) Inc

Looking ahead, Alam Maritim said: "The business outlook for Alam Maritim Group is influenced by the level of capital expenditure spending by the oil majors which is in line with the volume of exploration and production activities."

"Based on the current market condition, the domestic oil and gas industry is expected to be vulnerable and volatile in the interimperiod due to slower project rollouts and softening charter rates. Despite these challenges, we believe that the sector should be able to withstand short term uncertainties and sustain with solid fundamentals in the long run," it added.