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MHB Q2 profit halved to $4.7m

MHB Q2 profit halved to $4.7m
The downturn in the oil and gas (O&G) industry continues to weigh on Malaysian offshore fabricator Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) with second quarter net profit halved to MYR18.03m ($4.7m) mainly due to lower contributions from its offshore construction and conversion business, it said in a stock market announcement.

Revenue meanwhile fell 41% to MYR582.14m. Revenue and operating profit from the marine repair and upgrading segment were higher higher however, mainly due to higher value of vessels repaired, especially from rigs/special vessels, floating storage units and the general cargo categories, with segment profit more than doubling to MYR19.44m.

The offshore segment’s operating profit plunged 58% to MYR6.46m. “Offshore (segment) registered lower revenue and operating profit as most projects have been completed or sailed away. In addition, the newly secured projects are still at the early stage of its project life cycle,” the company said.

It noted that additional provision for cost to complete was also made for Malikai tension leg platform project for Sabah Shell Petroleum Company, and MHB was pursuing compensations and claims from the client to recover the cost incurred.Looking ahead to the rest of the year, MMHE said recovery in the crude oil prices and the oil and gas industry remained highly uncertain given a confluence of unfavourable developments.

“We have seen several project awards being deferred due to these uncertainties,” it said.

MHB md and ceo Tuan Haji Abu Fitri Abdul Jalil said, “The recovery in the crude oil prices and the energy industry remain highly uncertain given a confluence of unfavourable developments that are taking place”.

However, the company expects its marine business to continue to perform better with steady work orders from new and repeat clients.