Highlight MHB's 1Q net profit up 4.03% on-year to RM36m

by **Cals** Tue 28 Apr 2015, 02:12

Highlight
MHB's 1Q net profit up 4.03% on-year to RM36m

KUALA LUMPUR (April 27): Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) ([You must be registered and logged in to see this image.] Financial Dashboard) saw its net profit rise 4.03% in the first financial quarter ended Mar 31, 2015 (1QFY15) to RM36.03 million from RM34.63 million a year ago on higher marine operating profit mainly due to higher value for vessels repaired.
Earnings per share (EPS) rose to 2.3 sen, against 2.2 sen in 1QFY14.
MHB (fundamental: 1.4; valuation: 2.0)’s 1QFY15 revenue, on the other hand, grew 7.15% year-on-year to RM719.50 million, from RM671.46 million, according to the offshore and marine services provider quarterly report to Bursa Malaysia today.
Both marine — from higher value for vessels repaired — and offshore segments contributed to the higher revenue.
Offshore-wise, the better top-line was due to the completion of the SK316 Wellhead Platform (WHP) project during the quarter. However, operating profit was lower from this segment due to higher additional cost to complete some existing projects.
“Currently, the group is fabricating the Malikai EPC Tension Leg Platform (TLP), the SK316 CPP (central processing platform), and WHP, the Besar-A WHP and Jacket, the North Malay Basin Project’s Bergading WHP, Jackets and connecting bridge and the External Turret Mooring System for the Petronas (Petroliam Nasional Bhd) FloatingLiquefied Natural Gas 2 project,” said MHB in a press statement.
“We are already seeing improvements in efficiency and cost management in our project execution. Moving forward, the increased emphasis would be on business development and marketing,” MHB managing director cum chief executive officer Abu Fitri Abdul Jalil said in the same statement.
“The business we are in remains challenging, with tough operating conditions. Nevertheless, we are cautiously optimistic in building up our order book in the medium term (within the next nine to 12 months). Our immediate priorities are to focus on smaller EPCIC jobs to keep the yards running and our people busy,” he added.
For the quarter under review, MHB secured a hook up and commissioning contract for the Kanowit project, valued at RM30.4 million under its offshore business segment. It has also bagged an enbloc repair and refurbishment contract from South Korea’s Pan Ocean, under its marine business.
“The group is taking up new challenges in bidding for international offshore and onshore fabrication projects. We are reasonably optimistic that we are able to compete effectively for jobs in the overseas market. We are currently pursuing some RM7 billion worth of projects both internationally and locally,” Abu Fitri said.
Abu Fitri, who was previously the group’s vice-president for offshore business, was appointed to helm MHB in March this year, succeeding Dominique Soras, whose contract of employment ended on Feb 28.
As at 3:17pm, MHB was trading at RM1.26 apiece, down one sen or 0.79%. The current price gives it a market capitalisation of RM2.02 billion.
(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.)