KUALA LUMPUR (Dec 22): Tanjung Offshore Bhd, which recently renamed itself T7 Global Bhd, aims to return to profitability in its financial year 2017 (FY17), with the bulk of its income expected to come from its oil and gas (O&G) segment.

The income stream will be chanelled from ongoing jobs as well as secured contracts, it said, including the RM100 million contract bagged from Repsol Oil & Gas Malaysia Ltd yesterday.

"Though we have diversified into different segments, our return to profitability, which we hope will take place in FY17, will be driven by our O&G sector," its chairman Datuk Dr Nik Norzrul Thani told reporters after finalising the group's extraordinary general meeting (EGM) today.

This, according to Nik Norzrul, is due to the group's expectations of recognising the incomes of the education and aerospace sectors only in FY18 as they are still in the developing stages.

To recap, T7 Global sought to diversify its portfolio to include education and aerospace this year. To mark the start of its education venture, it inked a memorandum of understanding (MoU) with Hills Education Group in May to form a joint venture (JV) to provide educational training. Earlier this month, T7 Global’s wholly-owned subsidiary, T7 Aero Sdn Bhd, also inked a deal with UK-based components manufacturer Kilgour Metal Treatment Ltd to jointly service aerospace components.

T7 Global slipped into the red in the financial year ended Dec 31, 2015 (FY15), after having made a net loss of RM76.26 million versus a net profit of RM1.06 million a year earlier.

A filing with the bourse last month showed that the group’s net loss narrowed to RM704,000 in the third financial quarter ended Sept 30, 2016 (3QFY16) from RM49.68 million in the same period last year.

Although the O&G business remains the group's bread and butter, it emphasised that it is putting more effort into developing the aerospace segment in view of the potential of the industry.

As for the group’s negotiations with UMW Holdings Bhd to set up a treatment plant within UMW Aerospace Sdn Bhd's facility space in Serendah, Selangor, Nik Norzrul said the feedback has been “very positive” so far.

"However, we are not limiting our options to just UMW's space. We are in talks with other parties too, but we cannot say much as everything is still being discussed.

"Nevertheless, we have the right engines and are ready for take-off. However, we remain [cautiously optimistic], and would rather underpromise and overdeliver than overpromise and underdeliver," he added.