KUALA LUMPUR (April 26): Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) posted a higher net loss of RM29.37 million in the first quarter ended March 31, 2019 (1QFY19) versus a net loss of RM25.27 million a year earlier, as work order materialisation has been slower than expected especially in the offshore-fabrication segment.

In a statement to Bursa Malaysia today, the group said despite crude oil price stability, project sanctions and materialisation of work orders are slower than expected, hence affecting orderbook replenishment.

Revenue for 1QFY19 was, however, higher at RM203.11 million versus RM188.28 million in the previous year.

"The (heavy engineering) segment reported a higher operating loss of RM23.9 million from a RM12.8 million loss in the corresponding quarter, mainly due to higher unabsorbed overheads as expected contract awards have yet to materialise.

"The (marine) segment reported an operating loss of RM7.5 million, comparable to the corresponding quarter. The group has not recorded any share of profit in joint ventures in the current quarter as all joint ventures have turned dormant beginning from final quarter of the last financial year," MHB said.

MHB's website indicates that the group is a heavy engineering solutions provider for a wide range of offshore and onshore facilities and vessels. Its ship repair operations are undertaken under the marine segment.

In the statement, MHB said that as the industry outlook continues to be challenging in the current financial year, the group remains cautious and committed to focusing on replenishing its order book, not only from the domestic market but also various geographical areas.

"The group's effort to diversify its business into new areas [has] begun to bear fruit with the recent award of a long-term plant turnaround and maintenance services by Petronas. This is aligned with the group's strategy to venture into services that provide recurring orders in support of business sustainability.

"The marine business segment is making a progress towards recovery. The group expects to see more dry docking activities at its yard in view of encouraging growth in global sea trade. During the period under review, the group has received more orders for LNG (liquefied natural gas) repairs compared to last year and is positive of maintaining current level of marine repair activities for this year," MHB said.