Malaysia-listed offshore services provider Alam Maritim Resources posted a net profit of MYR8.65 million (USD2.41 million), down 43% year on year (y/y) for the first quarter ended 31 March 2015.
The decline in profit was followed by lower revenue, which dropped 6% y/y from MYR79.2 million in the first quarter of 2014 to MYR73.7 million in the first quarter of 2015. Earnings contribution from Alam Maritim’s offshore support (OSV) dropped 48.4% y/y in the first quarter of 2015, mainly due to lower average usage rate of chartered vessels.
However, earnings derived from its subsea services or Offshore Installation and Construction (OIC) segment were higher, exceeding 100% y/y to around MYR37.3 million in the first quarter of 2015, largely down to the increase of revenue contribution from its subsea project, Alam Maritim said.
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The company recorded lower costs of sales at MYR57.6 million, down 9% y/y in the first quarter of 2015 that helped to lift its gross profit to MYR16.1 million, up slightly by 4% y/y from the corresponding period in 2014. Similarly, the company’s finance costs dropped from MYR4.85 million in the first quarter of 2014 to MYR2.87 million in the first quarter of 2015.
Going forward, Alam Maritim expects a “vulnerable and volatile” market condition for the domestic oil and gas industry due to slower project rollouts and softening charter rates.
However, the company believes that the oil and gas sector should be able to withstand the short-term uncertainties and sustain with solid fundamentals in the long run.