KUALA LUMPUR (Aug 21): Malaysia Marine and Heavy Engineering Holdings Bhd (KL:MHB) swung to the black in the second quarter thanks to cost recovery claims, sending its shares surging on Wednesday.
Shares of MHB climbed as much as 13% or 5.5 sen to 48 sen. The stock closed at 47 sen, up 4.5 sen or 11%, giving the company a market capitalisation of RM752 million. Trading volume totalled 5.43 million shares, about four times higher than its 200-day moving average.
Net profit for April-June 2024 (2QFY2024) was RM73.92 million compared to a net loss of RM388.7 million a year ago, MHB said in an exchange filing. Revenue for the quarter, however, fell 14.8% year-on-year to RM900 million from RM1.056 billion on lower contribution from ongoing projects as many were nearing completion while the recently awarded projects are still at early stage.
MHB is exploring a balanced portfolio in both conventional and clean energy spaces, managing director and chief executive officer Mohd Nazir Mohd Nor said in a separate statement. In the meantime, investment by oil majors in upstream activities provides opportunities for conversion projects, he added.
The company, which has a niche focus on liquefied natural gas carriers, aims to broaden its customer base amid the growing number of the carriers in the market. Intense competition remains a challenge given the emergence of new repair yards in neighbouring countries and China, he said.
“We will continue the efforts to improve our contracting strategies” amid supply chain disruptions and price volatility, Mohd Nazir added.
The company’s heavy engineering segment — which builds onshore and offshore oil rigs and accounted for 90% of its revenue — recorded an operating profit of RM67.7 million mainly due to the cost recovery claims while losses in 1QFY2023 were due to provisions from revised project schedule.
The marine division saw higher dry-docking and repair services, reporting a jump in operating profit to RM9.13 million from RM3.28 million.
For the first half of FY2024 (1HFY2024), the group’s total revenue grew 20% to RM1.678 billion from RM1.395 billion a year ago, while the group turned in a net profit of RM85.28 million from a net loss of RM385.14 million.
No dividend was declared.