Malaysia Marine 3Q net profit up at RM39m on deferred tax, higher revenue

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KUALA LUMPUR (Nov 5): Malaysia Marine and Heavy Engineering Holdings Bhd's (MHB) net profit rose 7.3% to RM39.09 million in the third quarter ended September 30, 2014 (3QFY14) from RM36.43 million a year earlier.

In a filing with Bursa Malaysia today, MHB said profit had risen mainly on deferred tax as both its offshore and marine segments registered lower profits. The offshore segment undertakes construction of oil and gas structures while the marine segment specialises in vessel repair.
 
MHB registered tax assets of RM19.04 million in 3QFY14 compared to tax expense of RM4.46 million a year earlier, according to the company's income statement.

Revenue for the quarter surged to RM539.79 million against RM449.67 million previously. MHB said profit before tax fell to RM20.07 million from RM41.12 million.

In the nine months to September 30 (9MFY14), MHB's net profit declined to RM113.45 million from RM134.58 million a year earlier.

Revenue, however, grew to RM2.19 billion against RM2.15 billion.

On prospects, MHB said it foresaw a challenging backdrop in the vessel repair segment due higher capacity in the region.

"The marine business unit faces stiff competition from increased vessel repair capacity in the region but medium term prospects remained favourable as the continued growth in the number of shipping vessels would provide a growing need for dry docking and marine repair services," it said.

For its offshore business segment, MMHE said it had been awarded a few new projects which were expected to contribute to the group’s financial performance in the coming financial year.

"Concurrently, the group is also actively bidding for new domestic and international projects where aggressive competition is expected with participation of regional and international companies," it said,

MHB shares fell two sen or 0.9% to settle at RM2.19 at 12.30pm for a market capitalisation of RM3.45 billion. The stock saw 870,500 shares done.

MHB is a 66.5% subsidiary of MISC Bhd, which in turn, is a 62.67%-owned unit of national oil company Petroliam Nasional Bhd.