Steep dip in MMHE earnings, revenue

PETALING JAYA: Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) posted a 65% year-onyear drop in net profit to Rm46.4mil for the quarter ended Dec 31, 2011 mainly due to no further recognition of revenue from engineering, procurement, construction, installation and commissioning for the Turkmenistan Block 1, Phase 1 project.

MMHE told Bursa Malaysia that the project contract was novated to a jointly controlled entity, MMHETPGM Sdn Bhd, with effect from Jan 1, 2011.

Revenue for the quarter under review dropped 45.6% year-on-year to Rm716mil.

It should be noted that MMHE’S financial year-end has been changed from March 31 to Dec 31.

Thus, for the nine-month period ended Dec 31, 2011, MMHE posted a 36.2% year-on-year drop in net profit to Rm205.6mil while revenue decreased 39% to Rm2.14bil.

Its earnings per share for the ninemonth period was 12.90 sen, compared with 23 sen a year earlier.

MMHE said in addition to the reduction in the operating profits of its main business segments, there were higher foreign exchange losses during the period.

Regarding the prospects for the current year, MMHE pointed out that capital expenditure in the upstream oil and gas sector was expected to remain relatively strong, based on recent oil and gas discoveries in local offshore as well as increased activities to improve oil and gas production.

The group said its engineering and construction segment was expected to perform favourably through successful execution of projects-in-hand and recently-secured contracts, while its marine repair and conversion segment was expected to perform satisfactorily.

MMHE has recommended a final single tier dividend of 10 sen per share for the financial period ended Dec 31, 2011, amounting to Rm160mil, which is subject to shareholders’ approval.