KUALA LUMPUR (Aug 6): Boustead Heavy Industries Corporation Bhd’s net profit for the second quarter ended June 30, 2015 (2QFY15) fell 18% to RM9.16 million, from RM11.17 million a year ago, mainly due to higher operating cost and higher losses posted by associates.

Its latest quarterly revenue, however, gained 13% to RM75.15 million, from RM66.47 million in 2QFY14, due to higher revenue from defence-related maintenance, repair and overhaul (MRO) activities, as well as Belum Topside oil and gas project.

In its cumulative six months (1HFY15), its net profit jumped 47% to RM17.58 million, from RM11.95 million a year ago, mainly due to higher percentage of completion for the Belum Topside project and higher share of profit from joint venture companies.

Revenue for the period also increased 6% to RM138.55 million, from RM130.68 million in 6MFY14.

BHIC (fundamental: 0.45; valuation: 0.30) noted the heavy engineering segment contributed positively to the group’s revenue in 1HFY15, with the progress of Belum Satellite (BE-SA) Topside Facilities for Murphy’s Sarawak SK309/311 gas development project, and higher revenue from defence-related MRO activities.

Moving forward, the group said the heavy engineering segment will continue to drive the group’s performance through MRO activities, though it is cautious in expanding its oil and gas business, in view of the present environment and the announcement of capital expenditure cuts by oil majors.

BHIC’s counter closed 4 sen higher at RM1.84 today, for a market capitalisation of RM457.16 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.)