KUALA LUMPUR (May 23): Boustead Heavy Industries Corp Bhd is in the red for the second consecutive quarter, posting a net loss of RM4.3 million for the first quarter ended March 31 (1QFY19) mainly due to lower defence-related and commercial-based maintenance, repair and overhaul (MRO) activities.

In a bourse filing, the group said a year ago, it posted a net profit of RM4.5 million in the corresponding quarter last year, due to the lower MRO activities, negative contributions from its associates and lower negative contribution from its energy segment.

Meanwhile, quarterly revenue was 8.62% lower at RM36.3 million, from the RM39.72 million posted a year prior.

However, on a quarterly basis, the group narrowed its losses from the RM131.91 million posted in 4QFY18, thanks to progress on defence-related MRO activities.

The lower revenue during the period was due to a delay in finalising submarine contracts which were eventually received and accepted in March this year.

Nonetheless, its joint venture companies posted a positive contribution of RM1.2 million due to progress made on its Littoral Combat Ships (LCS) project for the Royal Malaysian Navy (RMN).

On its prospects, the group said the award of in-service support (ISS) for the RMN’s prime minister class submarines are expected to contribute positively to the group.

“Despite having a reduction in the LMS (Littoral Mission Ship) contract price pursuant to the decision to build and deliver all four vessels in China, the Group expects the overall earnings from this project to remain intact.

“On April 15, 2019, the launching and naming ceremony of LMS1 was held in China. The LMS1, was given the pennant number 111 and named KERIS. The launching and naming ceremony of LMS2 is expected to be held by middle of 2019.” Said the group.

It added that is expanding it customer base to other Government agencies such as the Royal Malaysian Police, Malaysian Maritime Enforcement Agency and the Fisheries Department and also tap into regional markets in the Middle East and Southeast Asia.

The counter was not traded today, with the counter last traded at RM1.28, giving it a market capitalisation of RM318.03 million.