Malaysia-listed offshore services provider UMW Holdings posted a profit of MYR133.4 million (USD31.3 million) for the second quarter of 2015, down 51% year on year (y/y), while its revenue was at MYR3.4 billion, down 12% y/y.
The company attributed the decrease in earnings to revenue reduction in its oil and gas segment, which was hampered by lower timecharter rates and lower utilisation of assets during the period.
However, the reduction in revenue was mitigated by translation gains from the appreciation of the US dollar against the Malaysian ringgit.
UMW, in its filing to Bursa Malaysia, stated that new assets ¬- hydraulic workover unit UMW GAIT 6 and jackup rig UMW NAGA 6 – have contributed positively to the company’s revenue in the second quarter of 2015. Its other asset, jackup rig UMW NAGA 7, has yet to secure a contract and was added on to the company’s operating expenses.
Commenting on the market prospect, the company stated, “The outlook for the oil and gas segment is adversely affected by the drop in oil prices. Timecharter rates remain under pressure in a highly competitive environment where rig supply far outnumbers demand.”
Because of these factors, UMW noted that major oil and gas companies will continue to re-evaluate their capital and operating expenditure to cushion the impact of low oil prices.