KUALA LUMPUR (Nov 23): Dayang Enterprise Holdings Bhd returned to the black in the third quarter ended Sept 30, 2020 (3QFY20) with a net profit of RM36.08 million after a loss-making quarter in 2QFY20.

Dayang attributed the profitable quarter to wider profit margins as a result of improved productivity and efficiency in work orders.

Quarterly revenue grew 34.7% quarter-on-quarter at RM230.21 million compared with RM170.9 million in the preceding quarter.

In a filing with Bursa Malaysia today, Dayang said the increase in revenue was mainly due to a higher vessel utilisation rate at 62% versus 52% in 2QFY20 and higher work orders received from the topside maintenance contracts.

On a year-on-year basis, Dayang's 3QFY20 net profit came in 66.3% lower compared with RM107.10 million in 3QFY19.

Revenue shrank 35.6% against RM357.58 million in 3QFY19.

"The reduced revenue was mainly attributable to lower vessel utilisation at 56% for the financial period ended Sept 30, 2020, as compared to 71% in corresponding period ended Sept 30, 2019, resulted from the delayed work orders awarded from oil majors since [2QFY20]," Dayang said.

Dayang also noted higher operating costs incurred during the quarter to adhere to the standard operating procedures to combat Covid-19, which contributed to the lower net profit.

For the cumulative nine-month period, Dayang recorded a net profit of RM44.42 million, down 72% from RM158.05 million recorded in the previous year, while revenue slid by 24.7% at RM573.22 million compared to RM761.16 million.

On its prospects, Dayang noted that its vessel utilisation rate came out stronger as business activity resumed towards its normalcy after the government began to ease the lockdown measures.

As such, Dayang said it is optimistic that the group's earnings trend will be sustainable, premised on its fairly sizable order book at an estimated value of RM3.6 billion to last at least until 2023.

"Notwithstanding the volatility in oil price, we remain upbeat on the company's future prospects as Dayang has emerged stronger after going through one of the most challenging periods over the past few years," it said.

"We will continue to be vigilant and exercise due care and prudence in the running and administration of the group's business. We remain confident that our strong execution track record, coupled with our solid balance sheet, will help us weather this challenging period," Dayang added.

Shares in Dayang were up 8.33% or eight sen to close at RM1.04 per share with a market capitalisation of RM1.2 billion.