MMHE says turnaround is a year away

PETALING JAYA: Oil rig builder Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) has painted a bleak outlook for the rest of 2018 after posting its second straight quarterly losses.

A recovery, it said, is expected to happen next year, at the earliest.

“The overall outlook for the second half of the year is not expected to show much improvement, as market recovery continues to be slow and any meaningful opportunities can only materialise in 2019,” it said in a filing with Bursa Malaysia.

The company, which is 66% owned by MISC Bhd, made a net loss of RM49.5mil in the second quarter ended June 30 on a revenue of RM223mil.

Cumulative half-year losses expanded to RM74.8mil.

The oil and gas industry remains in a slump amid output cuts initiated by the Organisation of the Petroleum Exporting Countries since 2017 that have lifted the price of crude oil to above US$70 per barrel.

While the steady price of crude oil is expected to spur oil majors to increase capital spending in the coming years, the near-term outlook for the industry remains uncertain.

“While there is a growing optimism for an increase in offshore activities, these have yet to trickle down to real opportunities for the heavy engineering segment,” MMHE said.