Friday 29 Mar 2024
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KUALA LUMPUR (Mar 27): Silk Holdings Bhd narrowed its net loss in the second financial quarter ended Jan 31, 2015 (2QFY15), thanks to increased revenue from its oil and gas (O&G) support services division and lower losses at its highway unit.

The offshore support vessel services provider and highway concession holder posted a smaller net loss of RM4.71 million in 2QFY15 compared with RM7.26 million a year ago.

Revenue rose 21.9% to RM103.55 million from RM84.95 million in 2QFY14.

In a filing with Bursa Malaysia today, Silk (fundamental: 0.2; valuation: 0.3) said the O&G support services division recorded a higher revenue during the quarter under review mainly due to increased capacity following the acquisition of three new vessels in the previous financial year ended July 31, 2014 (FY14), net of disposal of two vessels during the same period and improved fleet utilisation.

The O&G support services division remained the group’s main source of revenue and operating profit, contributing 76.2% of revenue.

For the six-month period (1HFY15), Silk also narrowed its net loss to RM7.99 million from RM13.56 million a year ago.

Revenue jumped 17.7% to RM211.09 million from RM179.4 million in 1HFY14.

In a statement today, Silk chairman Datuk Mohd Azlan Hashim said the group remains confident that its overall long-term prospects remain positive.

He said oil prices have fallen significantly since June 2014 and there is a move towards cost rationalisation within the industry going forward which may result in weaker revenue performance ahead.

“Despite the challenging conditions, the board of directors is cautiously positive of the division's prospects and is of the view that contributions from the O&G support services division is expected to remain positive,” said Azlan.

In addition, he expects the highway division to continue to enjoy further growth in traffic volume due to the highway’s excellent connectivity.

“Although the highway division will continue to record accounting losses due to the existing high finance and amortisation costs, it is expected to remain cash flow positive on an operational basis,” he added.

Silk shares closed down 2 sen or 3.88% at 49.5 sen today, giving it a market capitalisation of RM347.26 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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