KUALA LUMPUR (April 16): Coastal Contracts Bhd (KL:COASTAL) said it has adopted a dividend policy of distributing at least 20% of its net profit, effective from the current financial year.

The dividend payments will take into account of the oil and gas services company’s financial position, cash flow and funding requirements, as well as its future prospects, strategic plans and capital expenditure needs, according to a filing with Bursa Malaysia on Thursday.

Other considerations include working capital requirements, debt servicing obligations — including any loan covenants — and prevailing economic and market conditions.

“The board will review the dividend policy periodically to ensure its continued relevance and alignment with the group's growth objectives and financial position. The actual dividend declared in any financial year may vary depending on the circumstances at the time,” said Coastal Contracts.

The adoption of the dividend policy comes amid heightened geopolitical tensions in the Middle East, which have pushed oil prices sharply higher. Brent was last traded at US$96.36 per barrel.

In a separate filing, Coastal Contracts declared a special dividend of three sen per share for the financial year ending Dec 31, 2025 (FY2025), payable on May 22. The company paid a dividend of five sen for the previous year, when it resumed dividend payments after its last payout in 2017.

 Coastal Contract posted a net loss of RM48.1 million for FY2025, compared with a net profit of RM163.03 million a year earlier, as revenue fell to RM56.08 million from RM77.76 million.

The weaker performance was mainly attributed to higher non-recurring operating costs related to a jack-up gas compression service unit, as well as an impairment loss recognised on amounts owing from a charterer.

Shares of Coastal Contracts, which have fallen over 25% year to date, closed unchanged at RM1 on Thursday. This values the company at RM561.53 million.