KUALA LUMPUR (Aug 29): Oil and gas services provider Deleum Bhd has reported a 15% rise in its second quarter net profit, as its power and machinery businesses delivered better operating results amid increased exploration and production activities in the industry.

Net profit for the quarter ended June 30, 2023 (2QFY2023) increased to RM9.73 million or 2.42 sen per share, from RM8.46 million or 2.11 sen per share a year earlier, according to the group’s stock exchange filing on Tuesday.

The group declared a first interim dividend of two sen, with the ex-date falling on Sept 13.

Deleum’s power and machinery business involves the sale and maintenance of gas turbines and related parts, as well as the supply of combined heat and power plants, valves, flow regulators and other  production-related equipment.

Revenue from this business segment doubled to RM155.32 million, from RM77.67 million in 2QFY2022. It was the largest top line contributor for Deleum, equivalent to 82.6% of its total revenue.

For the first half of FY2023 (1HFY2023), the group’s net profit grew 14% to RM18.86 million from RM16.57 million in the previous corresponding period, while revenue increased 36% to RM311.52 million from RM229.1 million.

Going forward, Deleum is optimistic that FY2023 would be a “good year” for the group, as it continues to actively participate in tendering for additional contracts in the future.

“We remain committed to our strategic goals of extending our product and service offerings and expanding our regional footprints,” it said.

Deleum added that the oil and gas sector is expected to remain resilient in the second half of the year, supported by increased exploration and production activities.

“Furthermore, the continuation of Opec+’s supply controls to sustain the Brent crude price will provide comfort to major oil producers to proceed with their capital expenditure plans which will benefit the services sector,” it added.

Deleum said its order book currently stands at RM537.9 million, consisting of works and equipment mostly to be delivered within 12 months.

Group chief executive officer Rao Abdullah said Deleum expects to maintain its growth momentum going forward, supported by the encouraging capital spending in the oil and gas sector.

“We are encouraged with the results of the successful awards of new contracts for our solid control business, with an estimated aggregate contract value of RM64.0 million from exploration and production clients in recent months.

“We anticipate this business to grow further in the future, as a new growth area for the oilfield services segment,” he said in a statement.

Shares of Deleum closed unchanged at 90 sen on Tuesday, giving the group a market capitalisation of RM361.4 million.