UMW O&G posts net loss of RM65 mil in 1Q
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UMW O&G posts net loss of RM65 mil in 1Q
UMW O&G posts net loss of RM65 mil in 1Q
By Meena Lakshana / theedgemarkets.com | May 23, 2016 : 7:36 PM MYTKUALA LUMPUR (May 23): UMW Oil and Gas Corp Bhd (UMW O&G) posted a net loss of RM65.08 million or 3.01 sen a share in the first quarter ended March 31, 2016 (1QFY16) compared with a net profit of RM32.15 million or 1.49 sen a share a year ago.
However, the quarterly net loss is substantially lower against the loss of RM409.13 million recorded in the preceding quarter ended Dec 31, 2015 (4QFY15), dragged down by massive impairment losses and goodwill.
The group's revenue more than halved to RM87.68 million in 1QFY16 from RM312.5 million in 1QFY15.
UMW O&G said both its drilling services and oilfield services segments contributed lower revenue in 1QFY16 due to much lower levels of exploration, development and production activities in the oil and gas industry.
The group said weak demands for drilling and oilfield services in 1QFY16 due to low oil prices had caused both the drilling services and oilfield services segments to incur losses.
The drilling services segment contributed RM81.3 million, which contributed nearly 93% of the total revenue of RM87.7 million, shrank 73% against the RM300 million recorded in the previous corresponding quarter, principally due to low utilisation of some of the assets in the group during 1QFY16 as a result of the significant cuts in capital and operating expenditures by oil majors, the filing read.
However, the additional revenue contributions from two new jack-up rigs, UMW NAGA 8 and UMW NAGA 7, which commenced operations in September and November 2015 respectively, mitigated the revenue reduction.
Consequently, the drilling services segment incurred a loss of RM93.4 million in 1QFY16 compared to a profit before tax of RM38.6 million in 1QFY15.
The oilfield services segment contributed barely RM6.4 million or 7.3% of the group's revenue compared with RM12.5 million or 48.8% a year ago, due lower revenue from the group's operations in Labuan, Thailand, China and Turkmenistan.
The oilfield services segment reported a loss before tax of RM1.4 million in 1QFY16 compared to a profit of RM2.7 million recorded in 1QFY15.
UMW O&G shares dropped one sen at 90.5 sen, with a market capitalisation of RM1.96 billion.
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