(MMHE) returned to the black in the fourth quarter of its financial year ended Dec 31 with a net profit of RM9.28mil versus a net loss of RM25.22mil in the previous corresponding quarter.The turnaround came amid a slight increase in revenue to RM275.64mil from RM273.24mil the comparative quarter, due mainly to improved revenue in the marine segment.
On a segmental basis, revenue in the heavy engineering business was 33.7% lower year-on-year at RM148.5mil mainly owing to most ongoing projects at their tail end while newly secured projects were at their infancy stage.
The segment reported an operating loss of RM10.3mil as compared to a profit of RM1.6mil in the fourth quarter of 2018 due to the lower revenue and higher unabsorbed overheads.
The marine segment meanwhile posted revenue of RM127.1mil, a 158% improvement over RM49.2mil in the previous corresponding quarter on higher contributions from conversion work and LPG vessels.
Operating profit was RM5.2mil versus operating loss of RM33mil in the previous same quarter.
A further profit of RM1.3mil was recognised from MMHE's share in joint ventures.
For the entire 2019, MMHE recorded a net loss of RM34.22mil, which was an improvement over the loss of RM122.69mil in 2018.
Revenue was also improved to RM1.01bil from RM974.35mil in the previous year.
According to the group, its property, plant and equipment and total equity as at the end of the financial year ended Dec 31 stood at RM1.7bil and RM2.4bil respectively.
Moving forward, MMHE is prudent on the outlook for the heavy engineering business in the near term amid uncertainties over the timing of capital spending by major oil and gas players.
"There were modest signs of oil price recovery throughout the year, rising towards the end of the fourth quarter due to de-escalating trade tensions following a positive Phase One trade talk between the United States (US) and China and further production cuts by OPEC.
"However, outlook is expected to remain uncertain in light of continuing sluggish global economic growth, geopolitical instability, oil demand disruptions, growth in US shale oil production and the intensifying coronavirus outbreak," said MMHE managing director and CEO Wan Mashitah Wan Abdullah Sani.
Meanwhile, MMHE is cautiously optimistic on the outlook for the marine business in view of the expected global LNG expansion driven by an increase in exports from Qatar, Australia, Russia and the US to the Asia Pacific market.
"In view of the implementation of the International Maritime Organization (IMO) requirements on 1 January 2020, the Group expects no further deferment of dry docking activities by ship owners in 2020," she said.
