MHB slips into the red in FY18, fourth consecutive loss-making quarter

-A +A

KUALA LUMPUR (Feb 13): Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) slipped into a net loss of RM25.22 million in the fourth quarter ended Dec 31, 2018 (4QFY18), against a net profit of RM48.13 million a year ago, no thanks to operating loss from its marine segment.

This marked the fourth consecutive loss-making quarter for the group.

MHB's loss per share stood at 1.6 sen in 4QFY18 compared to earnings per share of 3 sen in the previous year.

Its quarterly revenue, however, was up 10.2% to RM273.24 million from RM247.95 million in 4QFY17, according to a filing to Bursa Malaysia today.

The marine segment recorded RM33 million operating loss, against RM12.1 million profit in the corresponding quarter, mainly due to insufficient dry docking works to absorb fixed overheads and compressed margins for dry docking activities in the current quarter, MHB explained.

For the cumulative full year ended Dec 31, 2018 (FY18), MHB saw a net loss of RM122.69 million versus a net profit of RM34.23 million the prior year, while revenue rose 1.9% year-on-year to RM974.35 million from RM956.41 million.

The group's loss per share stood at 7.7 sen in FY18 against earnings per share of 2.1 sen a year ago.

Looking forward, MHB said the group remains prudent on the outlook for the industry in the near term given the uncertainties surrounding timing of capital spending by major oil and gas players.

Despite the gradual improvement as oil prices have begun to ease at between US$50 (RM203.25) and US$70 per barrel, a range of factors has continued to influence oil prices including production cuts by OPEC, growth in US shale oil production and growing political tension across the globe, said MHB.

"The outlook for marine business remains positive as global LNG trade is expected to expand firmly, driven by increase of exports from the US and Australia to Asia," said MHB.

In view of the forthcoming implementation of new rules by International Maritime Organization (IMO), the group expects no further deferment by ship owners for dry docking activities in 2019.

MHB added the group had during the year secured a number of long-term offshore fabrication frame agreements which are on call-out basis including the long-term agreement (LTA) signed with Saudi Arabian Oil Company (Saudi Aramco).

"These are expected to contribute positively to the group's revenue in 2019 and beyond," said MHB.

Meanwhile, MHB remains committed to replenishing its orderbook in various geographical areas, said the group, adding that efforts to ensure competitiveness of ongoing and future bids are continuing and remain a priority.

At the noon break, shares of MHB settled one sen or 1.53% lower at 64.5 sen, giving it a market capitalisation of RM1.03 billion.