Boustead Heavy earnings drop in third quarter

PETALING JAYA: Boustead Heavy Industries Corp Bhd (BHIC) saw a 47.9% decline in net profit to RM7.75 million for the third quarter ended Sept 30, 2017 compared with RM14.88 million in the previous corresponding period, due to higher operating cost.

Revenue was down slightly from RM64.31 million to RM64.26 million.

It has proposed to declare an interim dividend of 2 sen per share for the quarter under review.

In a filing with the stock exchange, BHIC said despite the government’s announcement of a cutback on its defence spending in the current year’s budget, the group expects the contracts awarded recently to the joint venture companies to contribute positively towards its future earnings.

“In addition, the group will continue to pursue potential contracts with parties other than Ministry of Defence such as the Royal Malaysian Police and Malaysian Maritime Enforcement Agency as well as in foreign markets.”

Nonetheless, BHIC noted that commercial shipbuilding looks set to continue to come under pressure from low demand for ships, tonnage overcapacity, tight financing and uncertain economic outlook.

“This will continue to put pressure on shipyards which are already reeling from thin order book and cancelled deliveries.”

It added that the trend of oil majors scaling down on capital expenditure is expected to continue and pose challenges to players in the oil and gas industry for the major part of the year.

BHIC’s nine-month net profit, however, jumped 63% from RM21.1 million to RM34.4 million. Revenue came in at RM184.87 million, 6.2% lower than the RM197.05 million made a year ago.

Its shares fell 1 sen or 0.5% to close at RM2.01 yesterday on some 23,700 shares done.