Barakah nar­rows sec­ond quar­ter loss, out­look seen pos­i­tive

The Star Malaysia - StarBiz - - News -

KUALA LUMPUR: In­te­grated oil and gas (O&G) so­lu­tions provider, Barakah Off­shore Pe­tro­leum Bhd has nar­rowed its net loss in the sec­ond quar­ter ended June 30 to RM15.49mil, com­pared with RM82.12 mil in the same quar­ter last year.

Rev­enue im­proved to RM59.16mil, 12.4%, ver­sus RM52.63mil pre­vi­ously.

It at­trib­uted the growth to higher rev­enue con­tri­bu­tion from on­go­ing projects in the In­stal­la­tion and Con­struc­tion Ser­vices (ICS) of RM28.1mil from RM20.9 mil in Q2’17, while the Pipe­line and Com­mis­sion­ing Ser­vices (PCS) re­ported a rev­enue of RM31mil in quar­ter un­der re­view.

“We have seen an im­prove­ment in our fi­nan­cial per­for­mance as we en­deav­our to strengthen our cash flow and com­pet­i­tive­ness,” its chief ex­ec­u­tive of­fi­cer Nik Ham­dan Daud ( pic) said in a state­ment.

For the first half of 2018, net loss was down to RM35.42mil com­pared with RM86.73mil pre­vi­ously, while rev­enue was lower at RM78.54mil ver­sus RM129.47mil for the first six months of 2017.

He said earn­ings con­tin­ued to be im­pacted up by op­er­at­ing losses and high fixed over­heads, with its pipe lay barge, Kota Lak­samana 101 (KL101) as the main cost com­po­nent.

KL101 has re­mained idle due to lack of sig­nif­i­cant off­shore in­stal­la­tion projects in the sec­tor.

“None­the­less, our near-term fo­cus re­mains on ra­tio­nal­is­ing our op­er­at­ing costs as well as se­cur­ing more con­tracts to re­plen­ish our order book,” he said.

Barakah pro­jected ac­tiv­i­ties in the sec­tor to pick up in line with im­prov­ing oil prices, he added.

“We are ac­tively bid­ding for more projects with an es­ti­mated value of RM1.5bil, mainly for Trans­porta­tion and In­stal­la­tion Ser­vices (T&I), as more oil­field op­er­a­tors step up their field de­vel­op­ment pro­gramme. As we bid for more T&I jobs, op­por­tu­ni­ties for KL101 util­i­sa­tion is ex­pected to im­prove mov­ing for­ward,” said Nik Ham­dan.

He also said Barakah’s re­cent wins of two con­tracts for Main­te­nance, Con­struc­tion and Mod­i­fi­ca­tion (MCM) works are ex­pected to con­trib­ute pos­i­tively to the group’s earn­ings, re­plen­ish­ing the es­ti­mated order book to RM1.4 bil­lion as at July 31, 2018.

How­ever, the to­tal value of the con­tract will de­pend on the work or­ders is­sued through­out the du­ra­tion of the con­tract.

“We ex­pect to se­cure more MCM con­tracts go­ing for­ward on a back of a more com­mit­ted work pro­gramme bud­get al­lo­cated by oil field op­er­a­tors to main­tain and im­prove their fa­cil­i­ties.”

Barakah was awarded a five-year con­tract from two O&G play­ers, En­quest Pe­tro­leum Pro­duc­tion Malaysia Ltd and Sa­pura Ex­plo­ration and Pro­duc­tion (PM) Inc, for the pro­vi­sion of MCM ser­vices for struc­tures and fa­cil­i­ties of O&G fields off­shore Penin­su­lar Malaysia un­der pack­age A from July 2018 to July 2023.

On the group's prospects, Nik Ham­dan said “we fore­see Barakah's per­for­mance to re­cover in fi­nan­cial year 2019 with the im­prov­ing out­look of the O&G in­dus­try.

“We will con­tinue to ex­e­cute our strate­gies to im­prove the group's cost struc­ture as well as project ef­fi­cien­cies, while ac­tively par­tic­i­pat­ing in ten­ders to en­sure sus­tain­abil­ity.” — Ber­nama

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