KUALA LUMPUR: Deleum Bhd is looking at a few potential mergers and acquisitions (M&A) to enhance all three of its core businesses this year, says group managing director Nan Yusri Nan Rahimy.
“Yes we are looking at a few ... it will still be within the three segments, all are involved,” said Nan Yusri after the company’s annual general meeting yesterday.
Deleum’s three core businesses are power and machinery, oilfield services and maintenance repair and overhaul (MRO).
Nan Yusri was, however, tight-lipped on the potential M&A.
“It’s a fact that it’s a challenging environment for us, with the fall in oil price and all. But we do see potential for growth, especially in the oilfield and MRO section,” he said.
He said it is critical to have the MRO segment even though it didn’t do well last year because it intertwines with the other two segments.
For the financial year ended December 31, 2014 (FY14), Deleum’s net profit was at RM59.32 million, on a revenue of RM657.27 million. Its power and machinery segment generated earnings of RM67.9 million while its oilfield services segment reported RM28.3 million. Its MRO segment, on the other hand, saw a loss of RM5.3 million.
Nan Yusri noted, meanwhile, that there has been a slight contraction in terms of activity in the industry. “In the first quarter of this year we’ve already seen that (contraction), but there are also opportunities to strive for, especially on the product enhancement side. We see a lot of requests from Petronas (Petroliam Nasional Bhd) to help increase developments,” he said.
On Petronas’ capital expenditure and operational expenditure (opex) cuts, Nan Yusri said the group won’t see an impact from the reduction of the first.
“But opex cuts will hit us a bit. We are currently in discussions with Petronas, because they want us to have a substantial rate reduction,” said Nan Yusri.
Nan Yusri said Deleum’s tender book currently stands at between RM300 million and RM400 million.
This article first appeared in The Edge Financial Daily, on April 30, 2015.