“Greater competition from regional yards for international and selected domestic projects that the group is bidding for, will create a more competitive environment for the group, going forward,” MMHE said.
It noted that 2013 has started slow due to declining global oil prices despite E&P project costs staying “persistently high.”
“The industry has also seen major projects such as Woodside Petroleum's Browse onshore LNG and BP's Mad Dog Phase 2 being deferred and reassessed. As a result, while tender assessment and activities remained active, timely order intake may be challenging as compared to previous year,” it said.
Kuala Lumpur-listed MMHE produced a first quarter net profit of MYR50.6m ($16.59m), down 35.4% from MYR78.27m in the same period of 2012, due mainly to offshore jobs yet to be finalised with clients and profit from the early stage Malikai project yet to be recognised.
Revenue in the quarter ended 31 March 2013, however, jumped 38.6% year-on-year to MYR921.83m due to the relatively higher progress of existing projects and considerable contribution from the progress of the TLP Malikai Deepwater project during the quarter.
The company's marine segment, however, registered lower revenue with lesser number of vessels repaired at 29 against 31 units in corresponding quarter.
“However, a higher operating profit is recorded in the (first) quarter as marine managed to obtain better profit contribution from the vessels being repaired in comparison to corresponding quarter through better pricing and increased scope of work from shipowners; and better productivity,” MMHE said.
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