Higher expenses, tax paid cut T7 Global’s Q3 net profit

PETALING JAYA: T7 Global Bhd’s net profit for the third quarter ended Sept 30 plunged 75.23% to RM737,000 from RM2.98 million a year ago due to higher operating expenses and taxes paid during the three months.

In a filing with Bursa Malaysia, the group reported higher operating expenses of RM5.40 million compared with RM627,000 a year ago. It also incurred income tax expenses of RM935,000 during the quarter.

Revenue for the quarter rose 38.55% to RM52.74 million from RM38.07 million a year ago, driven by contributions from its engineering packages unit and marine sector.

During the quarter, the engineering packages unit registered a revenue surge of 347.71% to RM79.20 million from RM17.69 million a year ago, mainly driven by engineered packages and offshore equipment packages. The products and services division’s revenue expanded marginally by 2.74% to about RM86.37 million from RM84.07 million a year ago.

For the nine months ended Sept 30, net profit more than doubled to RM4.29 million from RM1.72 million a year ago while revenue rose 62.71% to RM165.57 million from RM101.76 million a year ago due to contributions from several long-term contracts from its engineered packages unit and marine sector.

Chairman Datuk Seri Dr Nik Norzrul Thani Nik Hassan Thani said the group sees improvement in oil prices and Petronas’ performance, and expects growth in capital expenditure by Petronas for the upcoming year, despite challenges in the oil and gas industry.

“T7 Global will continue to focus on projects in the O&G sector and look into new ventures to grow the business.

“The recent announcement made in Budget 2019 that aerospace industry has been identified as one of the sub-sectors in focus in the second half of the 11th Malaysia Plan 2016-2020 bodes well with the group’s diversification into the aerospace business,” he said.

Nik Norzrul said the group will look into leveraging the new business opportunity, and will build, operate and set up a metal treatment plant in Malaysia to pursue high value manufacturing businesses in metal treatment.

“Our new metal treatment plant, scheduled to start operations by mid-2019, is expected to contribute to the group’s revenue,” he added.