Boustead Heavy’s Q3 net profit triples

The Sun (Malaysia) - - SUNBIZ -

PE­TAL­ING JAYA: Boustead Heavy In­dus­tries Corp Bhd’s (BHIC) net profit for the third quar­ter ended Sept 30, 2016 more than tripled to RM14.88 mil­lion from RM3.94 mil­lion a year ago due to a profit from dis­con­tin­ued op­er­a­tion.

In a fil­ing with Bursa Malaysia yes­ter­day, the group re­ported a profit of RM2.37 mil­lion from dis­con­tin­ued op­er­a­tion dur­ing the quar­ter com­pared with a loss of RM6.79 mil­lion a year ago.

Un­der dis­con­tin­ued op­er­a­tion, the char­ter­ing seg­ment posted a higher profit due to over ac­crual of op­er­at­ing ex­penses pur­suant to the rec­on­cil­i­a­tion of ex­penses with the for­mer ship man­ager.

Rev­enue for the quar­ter rose 11.10% to RM64.31 mil­lion from RM57.88 mil­lion a year ago, driven by de­fence-re­lated main­te­nance, re­pair and over­haul (MRO) ac­tiv­i­ties.

BHIC said its joint ven­ture (JV) com­pa­nies posted a lower con­tri­bu­tion dur­ing the pe­riod, with con­tri­bu­tion mainly from Con­traves Ad­vanced De­vices Group un­der­tak­ing the Lit­toral Com­bat Ship project.

“How­ever, the im­pact was cush­ioned by the tax ex­emp­tion granted by the Fi­nance Min­istry on the sub­ma­rine projects un­der­taken by Boustead DCNS Naval Corp Sdn Bhd,” it said.

Its as­so­ciates posted a higher share of losses of RM24.5 mil­lion dur­ing the pe­riod due to vari­a­tion or­ders for the ship­build­ing project, ad­di­tional cost to com­ple­tion for the restora­tion of KD Per­an­tau, ad­di­tional staff costs in­curred un­der the mu­tual sep­a­ra­tion scheme, lack of com­mer­cial MRO of for­eign boats and lo­cal fer­ries and no new ship­build­ing projects.

There were also fewer Royal Malaysian Navy ves­sels en­ter­ing the yard for re­pair works.Mov­ing for­ward, the group ex­pects var­i­ous con­tracts in hand to con­trib­ute to­wards its fu­ture earn­ings. These in­clude the sup­ply of Lit­toral Mis­sion Ships to the Royal Malaysian Navy and a hu­man cap­i­tal devel­op­ment pro­gramme for trainees from the Royal Malaysian Navy and the group.

In ad­di­tion, the group’s as­so­ci­ate BN Ship­yard held a Keel Lay­ing Cer­e­mony in March for the first of six units of LCS be­ing built at the yard for the Royal Malaysian Navy.

“The con­struc­tion of the blocks and sys­tems and engineering in­te­gra­tion devel­op­ment ac­tiv­i­ties of the first unit of the LCS is cur­rently on-go­ing and the con­struc­tion for the sec­ond unit has started. The first ship is ex­pected to be de­liv­ered in 2019 and the re­main­ing five ships will be de­liv­ered at reg­u­lar in­ter­vals there­after,” it said.

The group said it will also con­tinue to source for new oil and gas projects amid the im­prov­ing in­dus­try land­scape.

For the nine months ended Sept 30, 2016, net profit fell 1.96% to RM21.10 mil­lion from RM21.52 mil­lion a year ago while rev­enue for the pe­riod rose marginally to RM197.05 mil­lion from RM196.43 mil­lion a year ago.

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