KUALA LUMPUR (Nov 5): Boustead Heavy Industries Corp Bhd’s (BHIC) net profit for its third financial quarter ended Sept 30 this year (3QFY14) has tumbled 34.8% on-year to RM10.39 million from RM15.93 million, primarily due to a lower share of profit from its joint venture companies (JVCos) and higher losses from its chartering segment.

The group’s filing with the local bourse today showed that revenue was largely flat at RM82.14 million, up just 1.2% from RM81.16 million in 3QFY13, while its earnings per share shrunk to 4.18 sen from 6.41 sen a year.

“The current period share of profit in JVCos of RM5.4 million showed a marginal decrease from RM6.4 million profit in the preceding quarter.

“The decrease was attributed to slow progress from the littoral combat ship (LCS) project, which subsequently affected one joint venture company, Contraves Advanced Devices Sdn Bhd’s performance under the heavy engineering segment,” it explained.

As for the nine months ended Sept 30 (9MFY14), the company raked in a net profit of RM22.33 million, down 28.45% on-year from RM31.22 million a year ago, mainly due to negative contribution from associates, primarily as a result of cost overruns on certain ship repair projects and fewer navy vessels entering the yard for repair works.

Its revenue for the period was, however, 2.61% higher at RM212.81 million from RM207.40 million a year ago, which it attributed to contributions from the chartering segment due to higher average charter rate obtained in the current period.

“Despite recording higher charter rates in the current period, the chartering segment continued to report a loss mainly due to the high level of operating costs and periodic dry docking expenses incurred on its chemical tankers,” it said.

Moving forward, it said for the upcoming period, the heavy engineering segment would continue to drive the group’s performance through defence related maintenance, repair and overhaul (MRO) activities as well as positive progress within the BE-SA topsides facilities for Murphy’s Sarawak SK309/311 Gas Development project.

“With the signing of the formal contract for the LCS project on 17 July 2014 between the BHIC’s associate company, Boustead Naval Shipyard Sdn Bhd and the Government of Malaysia, the progress of work would be accelerated and is expected to contribute positively to BHIC Group’s performance going forward,” it said.

BHIC’s counter closed 0.43% lower at RM2.34 today, giving it a market capitalisation of RM583.88 million.