KUALA LUMPUR (May 26): Barakah Offshore Petroleum Bhd saw its net profit surge 60.4% to RM15.12 million for its first quarter ended March 31 (1QFY15), backed by its ongoing oil and gas service contracts.
The offshore service provider’s revenue also stood 126.2% higher at RM190.09 million as compared to RM84.42 million a year earlier.
According to its financial notes on Bursa Malaysia, the group said that the increase in revenue was mainly due to the ongoing transportation and installation (T&I) projects, pipeline and commissioning services and also onshore engineering, procurement, construction and commissioning (EPCC) projects that were carried out during first three months of the year.
Barakah’s pipeline and commissioning services contributed 48% or RM190.99 million of the group’s total revenue as the ongoing progress of several hook-up commissioning and maintenance works were brought forward from the previous year.
Its installation and construction services on the other hand saw an increase to RM98.55 million from RM11.53 million the previous year. This was mainly due to ongoing T&I and EPCC projects that were also brought forward from the previous year.
Noting that Barakah has an order book of RM1.79 billion as at May 14, 2015 which will secure the group over the next three years, Barakah said that the visibility of sizeable projects moving forward for upstream and downstream will depend on clients decision to execute the project.
According to its 1QFY15 results briefing slides, the group has an order book replenishment target of RM300 million in this year, but future replenishments are pegged on Barakah’s clients’ capital expenditure programme rollout.
“At the same time, the group is actively participating in various pre-qualification and bidding exercises, both locally and internationally. In addition, the group is currently planning and executing for long-term growth to expand into selected business areas.
“Internally, the group will be more discipline in the operations and financial areas. For the former, the group is looking to undertaking cost saving exercises to ensure it stays competitive and could ride on the upturn in the prospects of the oil and gas industry in the future,” it said.
Barakah’s share price today closed 1.81% or 1.5 sen higher to 84.5 sen with a market capitalisation of RM667.3 million.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)