KUALA LUMPUR (May 18): Loss-making Boustead Heavy Industries Corp Bhd (BHIC) has bagged two contracts with a combined value of RM140.06 million from the Ministry of Defence (Mindef), according to its filings.

Its wholly owned subsidiary BHIC Submarine Engineering Services Sdn Bhd (BSES) has been awarded a contract worth RM99.8 million for interim in-support services for the Royal Malaysian Navy's (RMN) Prime Minister's Class submarines. The contract period is 11 months, from March 15 this year to Feb 14, 2024.

Meanwhile, another filing revealed that BSES has been awarded an extension of the RMN submarine facilities upkeep contract worth RM40.26 million. The contract is for 12 months, from Jan 1 to the end of December this year.

In April 2021, the group clinched the submarine facilities upkeep contract worth RM78.14 million for a period of two years, from Jan 1, 2021 to Dec 31, 2022.

According to BHIC, the latest formal contracts between the government and BSES will be executed at a later date. Both contracts will contribute positively to its earnings for the financial year ending Dec 31, 2023.

BHIC posted a net loss of RM21.55 million for the financial year ended Dec 31, 2022 (FY2022) compared with a net profit of RM15.19 million a year earlier, due to higher allowances for expected credit losses, finance cost and operating expenses.

Revenue for the year also decreased to RM141.76 million from RM149.19 million in FY2021 on lower submarine contracts and other defence-related maintenance, repair and overhaul (MRO) projects.

“The increase in the group’s receivables of RM25.3 million and payables of RM86.7 million in FY2022 was mainly due to amounts owing from or to related companies,” said BHIC in its filing.

Its cash and cash equivalent swelled more than six times to RM26.3 million against RM4.2 million in FY2021 mainly attributable to proceeds from the sale of Kota Kinabalu Industrial Park land of RM18.6 million.

BHIC was last traded at 32 sen, with a market value of RM79.51 million.

Read also:
BHIC gets RM78m submarine contract from Mindef