KUALA LUMPUR (Aug 26): Oil and gas service provider Deleum Bhd's (KL:DELEUM) second-quarter net profit fell 47.2%, dragged by weaker contributions from both its power and machinery and oilfield integrated services segments.

The weaker earnings was also due to a higher fair value loss on forward foreign currency exchange contracts of RM1.6 million, compared with RM700,000 a year earlier, and a RM1 million impairment loss on trade receivables, the group’s bourse filing on Wednesday showed.

Net profit for the three months ended June 30, 2026 (2QFY2026) dropped to RM10.34 million from RM19.59 million a year earlier.  Revenue fell 19.16% to RM191.49 million from RM236.88 million.

The group declared a first interim dividend of 3.50 sen per share, lower than the four sen paid a year ago, and payable on Sept 30. 

For the first half of FY2026, Deleum's net profit fell 39.7% to RM19.30 million from RM31.99 million a year earlier, while revenue declined 9.58% to RM376.42 million from RM416.30 million.

In a separate statement, the group said the weaker 1HFY2026 performance reflected the timing of customer activities and project execution, including maintenance deferments, operatorship transitions and a shift in sales mix, with higher contribution from lower margin sales across its two core business segments.

Deleum said the period saw changes in customer activity levels as major regional oil and gas operators underwent ownership transitions, which affected the timing of project execution and business activities across both the power and machinery and oilfield integrated services segments.

“While operatorship transitions have temporarily affected activity levels, we expect conditions to progressively normalise as the handover processes advance,” said Deleum chief executive officer Rao Abdullah.

“With our RM2.4 billion orderbook, strong financial position and established capabilities, Deleum remains focused on project execution and capturing opportunities arising from ongoing production optimisation, maintenance and asset enhancement activities,” Rao added.

At market close on Wednesday, Deleum shares were one sen or 0.87% lower at RM1.14, valuing the group at RM458 million. The stock has dropped 16% from its recent peak of RM1.36 in April.