KUALA LUMPUR (Aug 19): Daya Materials Bhd’s net profit soared 88% to RM8.77 million or 0.53 sen per share for the second quarter ended June 30, 2015 (2QFY15), from RM4.68 million or 0.34 sen per share a year earlier.

The better profit was on the back of an 11% increase in revenue to RM193.18 million for the quarter, from RM174.09 million in the previous year.

In its filing with the stock exchange today, Daya (fundamental: 0.55; valuation: 0.9) attributed the improvement in profit to better downstream sales, and the lower cost structure in the offshore/upstream business.

Its oil and gas (O&G) segment posted a 33% on-year increase in revenue to RM130.59 million, with a segmental profit of approximately RM11.43 million in 2QFY15.

“The higher revenue was mainly due to the seasonal sales on the catalysts during the quarter amounted to RM37 million and contributions from offshore subsea business in North Sea and Africa,” it said.

Meanwhile, its polymer segment saw a 9% rise in revenue to RM5.90 million, with marginal profit, while its technical services segment saw a 20% fall in revenue, which translated to lower profit.

For the six months to June 30, net profit jumped 51% to RM8.51 million, from RM5.62 million in the corresponding period last year, while revenue rose 19% to RM359.95 million from RM303.40 million.

“The board is of the view that the group's operational results for the financial year ending 2015 will be satisfactory, barring any unforeseen circumstances,” said the group in its prospects.

For its O&G segment, Daya said its business will largely depend on vessel utilisation and the timing of its proposed vessel purchase, while future vessel utilisation will depend on the actual deployment of its main European client during the summer months, the availability of spot business during winter months and overall offshore environment.

“We are confident [of] better results in the coming quarter in view of the confirmed contracts and ongoing deployment as well as improved cost structure of our upstream business.

“On the downstream sector, we are in the midst of restructuring our operations with a view of further strengthening our management team. For the year as a whole, the low oil price and continued uncertainties in the sector will remain the biggest challenge for all industry participants,” it said.

Daya rose 0.5 sen or 5.6% to 9.5 sen, bringing its market capitalisation to RM148.66 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.)