KUALA LUMPUR (Feb 27): TH Heavy Engineering Bhd, 29.81%-owned by Lembaga Tabung Haji, posted a net profit of RM907,000 in the fourth quarter ended Dec 31, 2018 — its second consecutive quarter in the black — after a string of losses in prior years.

In the previous year’s corresponding quarter, the group posted a net loss of RM33.37 million.

Its revenue for the quarter surged 518.5% to RM2.18 million from RM352,000 a year earlier, contributed by facility charges for an ongoing project as well as higher fabrication construction activities during the quarter.

The group said its profit for the year was supported by reversal of project and finance costs following its schemes of arrangement (SOA) with creditors, lower impairment loss on receivables, lower impairment loss on property, plant and equipment and the one-off impairment loss on amount due from customer recorded in the previous year.

On a full-year basis, the group’s net loss shrank 97.5% to RM2.57 million from RM103.5 million in the previous year, despite revenue being down 52.1% to RM2.59 million from RM5.4 million.

“The group is cautiously optimistic of its business prospects in the non-oil and gas sector subject to the successful implementation of the proposed SOA pending the issuance of the Islamic irredeemable convertible preference shares to the scheme creditors,” it said.

As at Dec 31, 2018, the group, via THHE Destini Sdn Bhd — a joint venture company between THHE Fabricators Sdn Bhd and Destini Shipbuilding and Engineering Sdn Bhd — has an RM697.4 million contract for the supply, delivery, testing and commissioning of three units of offshore patrol vessels for the Malaysia Maritime Enforcement Agency.

Going forward, it expects the fabrication business to remain challenging amid the competitive environment and capital expenditure cuts by the oil majors.

“The group has expanded into shipbuilding activities and also plans to expand into the refurbishment and maintenance works and non-oil and gas-related fabrication works which is expected to provide a more stable and recurring income to the group,” it said.

TH Heavy rose half a sen or 11.11% to close at 5 sen, giving it a market capitalisation of RM56.06 million.