KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd (MHB), a 66.5%-owned subsidiary of MISC Bhd, saw its net profit for the third quarter ended Sept 30 of financial year 2014 (3QFY14) increase 7.3% to RM39.09 million from RM36.43 million a year ago, even though contributions from both its offshore and marine segments were lower.

Revenue for 3QFY14 surged 20.04% to RM539.79 million against RM449.67 million a year ago. Earnings per share (EPS) rose to 2.4 sen compared with 2.3 sen in 3QFY13.

For the nine months ended Sept 30 (9MFY14), however, MHB’s net profit declined 15.7% to RM113.45 million from RM134.58 million a year ago. Revenue grew marginally by 1.38% to RM2.19 billion from RM2.15 billion in 9MFY13.

EPS was lower at 7.1 sen compared with 8.4 sen in 9MFY13.

In a filing with Bursa Malaysia yesterday, MHB said its offshore segment registered higher revenue due to progress attained from the ongoing SK316 and Malikai TLP projects, but the operating profit is relatively lower with fewer projects undertaken.

Its marine division’s 3QFY14 revenue came in lower against the corresponding quarter last year on lower value of repair work for liquefied natural gas vessels and rigs/special vessels.

On prospects, MHB said operationally, good progress has been attained with the two projects in MMHE East and MMHE West yards, that is, the TLP Malikai and SK316.

“The group is still recognising some residual revenue and profit from some of the recently completed or delivered projects, subject to securing approval of outstanding variation orders from the respective clients,” it said.

For its offshore business segment, MHB said it has won some new fabrication contracts that would contribute positively to the group’s 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.

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

This article first appeared in The Edge Financial Daily, on November 6, 2014.