Serba Dinamik’s 2Q net profit rises on higher O&M activity in Middle East

Serba Dinamik’s 2Q net profit rises on higher O&M activity in Middle East
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KUALA LUMPUR (Aug 26): Serba Dinamik Holdings Bhd’s net profit came in 13% higher at RM147.88 million for the second quarter ended June 30, 2020 (2QFY20), compared with RM130.44 million a year ago, thanks to a higher contribution from its operations and maintenance (O&M) segment.

Earnings per share (EPS) rose accordingly to 4.39 sen from 3.87 sen. On a quarterly basis, net profit rose 11% from RM133.72 million.

Meanwhile, revenue climbed 26% year-on-year (y-o-y) to RM1.44 billion versus RM1.14 billion last year. It was also higher than 1Q’s revenue of RM1.28 billion.

The group declared a second interim single-tier dividend of 1.3 sen per share for the financial year ending Dec 31, 2020 (FY20), which will be paid on Sept 29. Total dividends declared for this year so far amount to 2.5 sen per share.

In a statement yesterday, the group said it posted a higher revenue for 2QFY20 thanks to its O&M segment which contributed 83.2% of total revenue. Revenue for the period rose 25.7% or RM244.3 million from a year ago.

This was supported by increased maintenance, repair and overhaul (MRO) activities in the Middle East, namely in the United Arab Emirates (UAE), Qatar and Oman, as well as Malaysia.

Meanwhile, the group’s engineering, procurement, construction and commissioning (EPCC) segment remained its second largest revenue contributor at 10.3%, with revenue derived from various contracts in the UAE, Tanzania, Laos and Malaysia.

Serba Dinamik said its information and communications technology (ICT) segment, which offers customised solutions to the UAE, Qatar and Indonesia, also showed significant growth. It contributed approximately 6.5% or RM93.8 million of total revenue, almost three times the RM39.58 million posted for 2QFY19.

For the cumulative six months ended June 30, 2020 (6MFY20), net profit rose 16% to RM281.6 million, compared with RM242.59 million previously, as revenue also increased 28% to RM2.72 billion from RM2.12 billion a year ago.

“We are striving to increase our market share through new contracts as well as existing contracts both domestically and internationally despite the volatile market. On top of that, the group has also provided value-added solutions in O&M contracts by adopting the Fourth Industrial Revolution (IR 4.0) element to help asset owners achieve better performance and productivity of their equipment, such as with the use of artificial intelligence and data analytics pillars,” said Serba Dinamik group managing director Datuk Dr Mohd Abdul Karim Abdullah.

He added that the group had won two new ICT contracts in Zambia, as well as two sizeable contracts to develop a data centre and innovation hub in Abu Dhabi, which will enable the group to tap into institutional and retail bases domestically and internationally.

At the noon break, shares in Serba Dinamik were two sen or 1.16% higher at RM1.75, with a market capitalisation of RM5.9 billion.

Edited by Lam Jian Wyn