Singapore-listed offshore engineering company IEV Holdings (IEV) posted a profit of MYR8.6 million (USD2.1 million), up 58.6% year on year for the second quarter ending on 30 June 2015, despite recording lower revenue for the period.
The company’s earnings dropped by 39.9% y/y from MYR53.1 million in the second quarter of 2014 to MYR31.9 million in the second quarter of 2015. The decrease was attributed to the lack of a turnkey project for the second quarter of 2015 and the lower revenue contribution from IEV’s Mobile Natural Gas (MNG) sector. The decline in revenue from MNG for the second quarter of 2015 was due to the early termination of gas sales agreements with Indonesia-based PT Indofood, although this was partially offset by the subsequent addition of a two-year gas sales agreement with PT Kaldu Sari Nabati.
However, IEV recorded a 186.6% y/y increase of MYR9.8 million in the second quarter of 2015 due to the high gross profit margin of the group’s proprietary products. In addition, the company recorded a foreign exchange rate gain of MYR1.8 million in the second quarter of 2015 compared with an exchange loss of MYR0.5 million in the second quarter of 2014. The exchange rate gain was mainly due to the significant strengthening of the US dollar against the Malaysian ringgit during the second quarter of 2015, as a significant portion of IEV’s advances to subsidiaries are in US dollars.
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The company plans to intensify its globalisation efforts for its proprietary product through the recent appointment of agents and distributors in Africa, America, and the Middle East. IEV also expected new opportunities for engineering, procurement, installation, and commissioning contracts in a number of Asian countries, particularly in India, Malaysia, and Myanmar.
“The group continues to look for niche opportunities to offer its refurbished platform and decommissioning solutions throughout the region,” said IEV in its filing to the Singapore Stock Exchange.
In the meantime, the company has submitted bids for decommissioning projects in India and Indonesia, and for a refurbished platform in Malaysia. Moreover, funds have been channelled to existing projects in which IEV has already invested, including exploration and production activities in Pabuaran KSO, the biomass plant in Vietnam, and the CNG supply chain with Gas Malaysia Berhad in the Malaysian peninsular. These projects are scheduled to start generating income for IEV within the next three to nine months.