Friday 29 Mar 2024
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KUALA LUMPUR (June 19): TH Heavy Engineering Bhd (THHE), which is in the midst of formulating a plan to regularise its financial conditions, hopes to keep up the momentum of last week's contract win through to the rest of its financial year ending Dec 31, 2019 (FY19).

Chief executive officer Suhaimi Badrul Jamil said the group is expecting to turn a profit in FY19, following the positive momentum seen in the second half of FY18 and the first quarter ended March 31, 2019 (1QFY19).

He added that for the remaining quarters in FY19, the group is expecting to achieve similar performance as 1QFY19. THHE posted a net profit of RM2.48 million in 1QFY19, compared with a net loss of RM14.75 million a year ago, while quarterly revenue increased to RM11.53 million from RM186,000 in 1QFY18.

Suhaimi said this year's revenue and net profit growth will be driven by its MRO segment.

He added that the group is hopeful of submitting its regularisation plan to the relevant authorities by Oct 24.

The proposed regularisation plan would include the issuance of new Islamic irredeemable convertible preference shares (ICPS-i) to creditors of the Practice Note 17 company.

"However, the issuance of the ICPS-i is dependent on the company securing a sustainable business," Suhaimi told reporters after its annual general meeting here yesterday.

On June 13, THHE had bagged a US$11.4 million (RM47.4 million) subcontract from Afcons Infrastructure Ltd of India for the fabrication of piles for offshore jackets for the development of KG-DWN-98/2 NEP Block offshore India.

The proposed regularisation plan will see THHE reducing its total borrowings to RM55 million from RM149.01 million as at Dec 31, 2018.

Suhaimi said the proposed regularisation plan is about 80% complete with the scheme of arrangement already finalised. "The remaining 20% pending constitutes the matter of the ICSPS-I share issuance," he added.

On the contracts that the group, which is engaged in the fabrication of offshore oil and gas related structures, is currently tendering for, Suhaimi said there is a lot of demand for small boats measuring less than 15m from “various government agencies”.

In addition, the group has its marine vessel maintenance, repair and overhaul (MRO) activities.

Suhaimi also believes that doubt on the ability of the group to continue as a going concern will be resolved once it obtains approval for its proposed regularisation plan.

On April 24, its external auditor Deloitte had for the second time issued a disclaimer of opinion on the group’s financial statements for FY18.

The external auditor had first issued a disclaimer of opinion warning about TH Heavy’s ability to continue as a going concern for its FY17 financial statements.


 

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