KUALA LUMPUR: Scomi Group Bhd’s net profit fell 15.3% to RM5.01 million or 0.32 sen per share for the second financial quarter ended September 30, 2015 (2QFY16) from RM5.91 million or 0.38 sen per share a year ago, due principally to lower profit from its oilfield services, transport solutions and marine services divisions.
Revenue for the quarter also dropped 27.1% to RM337.76 million, from RM463.23 million in 2QFY15, due to lower revenue across all segments.
In a filing with Bursa Malaysia today, Scomi Group said the oilfield services division recorded lower revenue of RM250.9 million in 2QFY16, compared with RM317.3 million in 2QFY15, due to lower drilling activities in Malaysia, Indonesia, Myanmar and West Africa.
The transport solutions division also recorded lower revenue of RM43.3 million from RM73.9 million in 2QFY15, principally due to lower value of work done on monorail projects in Malaysia, India and Brazil.
As for its marine services unit, it saw lower revenue of RM43.6 million in 2QFY16, against RM72 million in 2QFY15, due to lower tonnage carried and lesser shipments for all contracts.
The weak results for 2QFY16 dragged down its net profit for the six months period (6MFY16) to RM14.74 million or 0.95 sen per share, a 14.6% decline from RM17.26 million or 1.11 sen per share a year ago.
Revenue also fell by 18.2% to RM717.65 million, from RM877.35 million in 6MFY15.
On prospects, Scomi Group said with the continued challenges globally in the currency market movements that have cost impacts in operations, it is cautious about the current financial year ending March 31, 2016 (FY16).
“Moving forward, revenue growth (for the oilfield services division) remains challenging, while we continue to explore new areas, such as graphene enhanced drilling fluids and lubricants and well rejuvenation,” said Scomi Group.
“Cash flow and cost optimisation remain a focus area and we expect these initiatives to positively impact on cash flow,” it added.
Scomi Group said oil prices are forecast to be subdued over the near term and as such, activity levels are likely to remain low.
“However, the pipeline for tenders in 2QFY16 is still very robust, with over US$400 million (RM1.7 billion) bids submitted.”
It noted that the marine services division outlook also remains challenging, with export forecast to the Indonesian coal market for 2016 estimated to be lower than current year.
“On the offshore side, persistent low oil price have curbed demand for offshore vessels. Competition in this area continues to be tough, but management remains focused on prioritising utilisation of our vessels by being very competitive with our charter rates,” it said.
Meanwhile, Scomi Group said its transport solutions division continues to pursue monorail projects in multiple markets, together with the new growth opportunities for the commercial vehicles in the leasing and maintenance business, both locally and abroad.
Scomi shares closed unchanged at 20.5 sen today, giving it a market capitalisation of RM318.6 million. – The Edge Markets, November 27, 2015.
