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MHB MARINE PROFITS DROP AS DRYDOCKINGS FALL

Sunday, October 28, 2018 

The marine division of Malaysia Marine and Heavy Engineering Holdings Berhad MHB has registered lower revenues for the nine month period ending September 2018, posting a revenue of RM273.7 million compared to RM279.4 million in the corresponding period.

The reduction is mainly due to lesser drydocking repair works secured as some ship owners had deferred their drydocking to a later period than planned and lower revenue from conversion works in the current period.

MHB’s marine segment recorded an operating loss of RM48.8 million compared to an operating profit of RM40.7 million in the corresponding period of previous year as a result of additional costs incurred on conversion works where revenue recognition are still pending verification and approval by clients as well as lower margin earned on dry docking works in the current period.

During the period, the division delivered two  conversion projects namely the FSO Benchamas 2 for MISC Berhad and the FSO Bergading for E.A. Technique (M) Berhad. The marine segment also completed the repair and maintenance of 66 vessels of various categories in the said period.

MHB CEO  Wan Mashitah Wan Abdullah Sani said: “With oil prices hovering between US$70-80 per barrel, the Group expects to see improvement in the offshore spending by oil majors. While this augurs well for order book replenishment, we are not expecting significant contribution from the Heavy Engineering segment for the remaining of this year.

“In view of the impending compliance to the International Maritime Organization (IMO) fuel sulphur cap ruling by January 2020, we expect a pickup in marine repair activities in the coming year. Whilst we are optimistic of maintaining current level of marine repair activities for the final quarter of this year, the Marine segment performance has been affected by deferment of dry dockings by clients in the first half of this year as well as protracted claim discussions with marine conversion clients.

 “As the industry outlook continues to be challenging in the current financial year, we remain cautious and will focus on replenishing our order book in various geographical areas. Effort to ensure competitiveness of ongoing and future bids are progressing and remains a priority.”

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