MHB delivers second straight profitable quarter

KUALA LUMPUR (Aug 17): Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) delivered its second straight profitable quarter with the period ended June 30, 2022 (2QFY22), due to the absence of cost provision associated with the Covid-19 pandemic, coupled with the recovery of dry-docking activities at its yard, thanks to the reopening of Malaysia’s international borders.

The group reported a RM21.97 million net profit for 2QFY22, versus a RM34.38 million net loss a year ago, while revenue grew 32.5% year-on-year to RM400.63 million from RM302.45 million, its filing with Bursa Malaysia showed.

MHB reported net losses from 4QFY20 to 4QFY21, before returning to the black by delivering a net profit of RM2.72 million for 1QFY22.

For the first half ended June 30, 2022, the group recorded a net profit of RM24.69 million, versus a RM138.73 million net loss for the corresponding period a year ago, while revenue grew 27% to RM818.41 million from RM646.02 million.

Going forward, MHB foresees growth in demand for dry-docking activities at its yard, as vessel owners gear up for higher seaborne trade requirements.

“The continued lockdowns in China have also improved our market share, as shipowners opted for alternative shipyards in the region.

“Nevertheless, the prevalent nationwide labour shortage may limit our ability to take up more jobs, and poses significant risks to the timely execution of dry-docking works,” it said, adding that its marine business segment is likely to remain challenging, albeit recovering gradually this year.

For the heavy engineering business, MHB said prolonged global supply chain disruptions and volatile commodity prices, such as for steel, amid a sharp rise in global inflation could adversely impact prospects for the segment as well as the execution of ongoing projects.

Nonetheless, the group remains cautiously optimistic about the outlook for the heavy engineering segment, as capital spending by oil majors is expected to continue to increase in light of high oil prices.

“The group maintains a cautious stance on the overall industry outlook, focusing on order book replenishment by capturing business opportunities in new regions and segments. At the same time, the group continues to focus on cost optimisation, while maximising value creation to ensure safe and timely execution of ongoing projects,” it said.

Shares in MHB had eased one sen or 2.5% to 38.5 sen per share at Wednesday's (Aug 17) noon market break, giving it a market capitalisation of RM616 million.