KUALA LUMPUR (Feb 10): Malaysia Marine and Heavy Engineering Bhd (MHB) posted its fourth consecutive quarterly net profit with RM27.14 million recorded in the fourth quarter ended Dec 31, 2022 (4QFY2022), from a net loss of RM107.79 million the year before.

Revenue slipped 1.85% to RM424 million from RM432.01 million on lower heavy engineering revenue, offset by higher contribution from the marine segment.

Quarter-on-quarter, MHB’s net profit rose 70% from RM15.95 million, its filing showed. This was however mainly from tax recoverable of RM20.82 million recorded in 4QFY2022, compared with RM230,000 the quarter before.

At the operating profit level, MHB booked RM9.78 million in the latest quarter, down 48.68% quarter-on-quarter (q-o-q) from RM19.06 million in 3QFY2022, as its heavy engineering segment turned back into the red although its marine segment’s performance improved.

The lower operating profit came despite revenue rising 3.61% q-o-q to RM424 million from RM409.23 million, as both segments’ contributions rose.

The weaker operating profit, MHB said, was “mainly due to foreign exchange losses as a result of the strengthening Malaysian ringgit, coupled with lower recovery of Covid-19 claims and lower reversal of cost provisions in the current quarter.”

With the strong fourth quarter, MHB’s net profit for the full-year ended Dec 31, 2022 (FY2022) came in at RM67.77 million, from a net loss of RM270.41 million in FY2021.

Earnings per share stood at 4.2 sen, beating street estimates of 1.8 sen, Bloomberg data showed.

Full-year revenue rose 12.56% to RM1.65 billion, from RM1.47 billion.

It was the group’s strongest full-year net profit since FY2014, when it recorded a RM129.93 million net profit on RM2.7 billion revenue.

On prospects, MHB pointed to high inflationary pressures and supply chain disruptions to continue to pose challenges to its heavy engineering business.

Meanwhile, it sees manpower constraints potentially affecting timely execution of dry docking works, which has seen higher activities under its marine segment.

“In addition, the recent lifting of China’s border restrictions could lead to tougher competition among shipyards for dry-docking opportunities, moving forward. As such, the group expects the marine business to remain challenging,” it said.

“Improving project execution and delivery remains a priority through prudent investment in technology, people, processes, systems, digitalisation and automation, as well as effective cost optimisation efforts,” it added.

Shares of MHB slipped half a sen or 0.69% to 72 at noon market break on Friday (Feb 10), giving it a market capitalisation of RM1.14 billion. The counter has rallied 77% since November last year.