KUALA LUMPUR, July 23 -- Malaysia Marine and Heavy Engineering Holdings Bhd's (MHB) net loss widened to RM397.02 million in the second quarter (Q2) to June 30, 2020, from a loss of RM9.48 million a year earlier as it recognised an impairment loss of RM300 million.
The company, which is 66.5 per cent owned by Petronas’ subsidiary MISC Bhd, attributed the impairment loss on property, plant and equipment and right-of-use assets to a collapse in demand for oil and energy owing to the COVID-19 pandemic.
This resulted in most oil and gas (O&G) companies deferring their upstream projects and cutting their capital spend, said MHB, which supports the O&G industry through solutions such as construction of offshore and onshore facilities as well as marine vessel repair.
“Moreover, the impairment is deemed necessary in anticipation of a prolonged recovery in the industry resulting from these exceptional events,” it said in a filing with Bursa Malaysia today.
Revenue for the quarter fell by 44 per cent year-on-year to RM155.31 million on lower contributions from both the heavy engineering and marine business segments.
For the first half-year, MHB achieved a net loss of RM390.89 million on revenue of RM501.75 million.
In a media statement, managing director and chief executive officer, Wan Mashitah Wan Abdullah Sani, said the heavy engineering segment posted a higher revenue of RM338.8 million against RM277.3 million previously mainly due to higher revenue from ongoing projects.
"(However) the segment reported a higher operating loss of RM68.5 million in the current period compared with loss of RM43.7 million previously, mainly contributed by additional cost and higher unabsorbed overheads arising from the COVID-19 pandemic amounting to RM90 million,” she said.
Meanwhile, the marine segment registered a lower revenue of RM162.9 million compared with RM202.2 million in the corresponding period last year, mainly contributed by the lower dry docking services following the yard shutdown during the Movement Control Order and the Government's border restriction ruling which prohibited international clients from coming to the yard arising from the COVID-19 pandemic.
Wan Mashitah said the segment reported an operating loss of RM31.5 million against an operating profit of RM1.2 million previously in tandem with the lower revenue and higher unabsorbed overheads.
"For the six-month period, the marine segment completed the repair and maintenance of 18 vessels of various categories, of which two were from repair works on liquefied natural gas (LNG) carriers," she said.
The group’s total assets and total equity at the end of the period under review stood at RM2.9 billion and RM2.0 billion, respectively.
"In line with the current challenging industry landscape and outlook, we continue to focus on cost management to optimise operating cost. We are also prioritising execution and safe delivery of ongoing projects. Additionally, we continue to intensify the pursuit of business opportunities in other segments in an effort to replenish our order book," Wan Mashitah said.
Malaysia National News Agency
No.28 Jalan BERNAMA
Off Jalan Tun Razak
50400 Kuala Lumpur
Tel : +603-2693 9933 (General Line)
Email : helpdesk[at]bernama.com