Malaysia Marine and Heavy Engineering Holdings’ (MHB’s) second-quarter net profit halved year-on-year (y/y) to MYR18.03 million (USD4.7 million) amid a slide in its offshore construction and conversion business.
Operating profit for MHB’s offshore unit plunged 58% y/y to MYR6.46 million with the completion of several projects while recently secured projects remain at early stages.
Yet the offshore fabricator’s marine unit more than doubled its operating profit to MYR19.44 million on repair work for rigs, floaters, and general cargo ships.
The company also incurred cost overruns for work on Sabah Shell Petroleum’s Malikai tension leg platform and is pursuing compensation from the client.
MHB warned that lower oil prices and the resulting sag in demand for offshore vessels could continue to present challenges.
“Recovery in the crude oil prices and the oil and gas industry remain highly uncertain given a confluence of unfavourable developments that are taking place,” said Tuan Haji Abu Fitri Abdul Jalil, managing director and CEO.
In its offshore business, MHB said it is pressing on with cost-saving initiatives to mitigate the impact of the current adverse cycle.
“Bidding activities are still brisk but awards, if any, are only expected by the end of the year,” added the company.