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Scomi FY16 Q1 profit down 14% to $3m

Scomi FY16 Q1 profit down 14% to $3m
Malaysian offshore solutions firm Scomi Group saw first quarter profit for its new financial year 2016 fall 14% to MYR11.3m ($2.7m) from MYR9.7m in the previous corresponding quarter due to the slowdown in the oil and gas market and marine segment.

Revenue also fell 8% to MYR379.9m from MYR414.1m previously.The oilfield services division saw profits fall by a quarter to MYR20.4m from MYR27.4m previously. This was mainly due to lower profit from operations as well as higher finance cost.

Looking ahead, the operating environment for this segment continues to remain challenging in the second quarter of the financial year, Scomi said as oil prices go below $50 a barrel, and activity slows down with spending being deferred and several new projects being pushed back.

The Marine Services Division meanwhile turned to a loss of MYR2.4m from a MYR3.3m profit previously on lower tonnage carried and fewer shipments for all contracts.

The outlook remains challenging for this division, Scomi said. "Nevertheless there have been some wins over the quarter as a result of increased bidding activities. Moving forward, there are no signs that coal prices will rebound in the short to middle term amid persistent concerns about a global supply glut in combination with expected declining coal demand from China," the company concluded.