KUALA LUMPUR (Feb 11): Malaysia Marine and Heavy Engineering Bhd (MHB) swung back to profit in the fourth quarter ended Dec 31, 2019 (4QFY19), as its marine segment also turned positive on the back of improved revenue from higher dry docking services on liquefied petroleum gas vessels and conversion work.

Also helping the group was tax refunds of RM6.45 million in the current quarter.

MHB reported a net profit of RM9.28 million compared with a net loss of RM25.22 million in 4QFY18, marking its first profitable quarter since end-2017.

Earnings per share for the quarter stood at 0.6 sen in 4QFY19 against a loss per share of 1.6 sen in 4QFY18.

Quarterly revenue rose by a marginal 0.88% to RM275.64 million in 4QFY19 from RM273.24 million a year ago, dragged down by a 33.7% decline in heavy engineering revenue during the current quarter, mainly due to most ongoing projects being at their tail-end while newly-secured ones were still at infancy stage.

In a statement today, MHB said the marine segment recorded an operating profit of RM8.5 million for 4QFY19 compared with an operating loss of RM81.7 million a year ago, in tandem with the revenue growth and lower unabsorbed overheads.

The better quarterly performance helped MHB narrow its net loss for the full FY19 to RM34.22 million from RM122.69 million a year ago, while revenue rose 3.6% to RM1.01 billion from RM974.35 million.

On prospects, MHB managing director and chief executive officer Wan Mashitah Wan Abdullah Sani said the outlook is expected to remain uncertain in light of continuing sluggish global economic growth, geopolitical instability, oil demand disruptions, growth in US shale oil production and the intensifying Covid-19 outbreak.

"As such, the group remains prudent on the outlook for the heavy engineering business in the near term amid uncertainties surrounding the timing of capital spending by major oil and gas players," she said.

Wan Mashitah said the group is also cautiously optimistic on the outlook for its marine business in view of the expected global liquefied natural gas expansion driven by an increase in exports from Qatar, Australia, Russia and the US to the Asia-Pacific market.

"We remain committed to replenish our order book by expanding our footprint in various geographical areas and diversifying into new business opportunities. Efforts to ensure competitiveness of ongoing and future bids remain a key priority, in tandem with continuing focus on cost optimisation and improved execution and delivery of ongoing projects," she added.

At 2.46pm, MHB shares were up 9 sen or 12.59% at 80.5 sen, with 449,300 shares done, giving it a market capitalisation of RM1.27 billion