KUALA LUMPUR (May 31): Boustead Heavy Industries Corp Bhd (BHIC) saw its losses shrink to RM916,000 in the first quarter ended March 31, 2021 (1QFY21), from RM74.51 million in 4QFY20.
In a bourse filing, the group said its quarter-on-quarter (q-o-q) losses were on account of milestones achieved for its maintenance, repair and overhaul (MRO) projects, noting that in 4QFY20 it recorded an allowance of expected credit loss from an associate of RM18.5 million.
Accordingly, it posted losses per share of 0.37 sen, compared with losses per share of 47.72 sen.
BHIC stated its joint venture companies posted a negative contribution of RM1.2 million in 1QFY21, with most of it from the CAD Group.
Meanwhile, a negative contribution of RM13.6 million in 4QFY20 was due to the provision of liquidated damages of RM27.3 million for the Royal Malaysian Airforce (RMAF) as a result of its failure to meet the Demand Satisfaction Rate (DSR) of 85% throughout the contract.
Quarterly revenue declined by 42% q-o-q to RM18.94 million from RM27.53 million.
It did not declare any dividends this quarter.
On a year-on-year (y-o-y) basis, the group sank into the red from a net profit of RM20.38 million, while revenue contracted 57% y-o-y from RM44.05 million.
On its prospects, the group said its new contract from the Ministry of Defence (Mindef) for submarine facilities upkeep for the Royal Malaysian Navy (RMN) and the extension of contracts such as the provision of maintenance and supply of spares for RMAF EC725 helicopters, and integrated maintenance and logistic support services on three units of MMEA Dauphin AS365N3 helicopters are expected to positively contribute to its bottom line.
“In early 2021, commercial ship repair achieves a total contract of RM3.8 million. The group continues to open for more vessels to enter our yards amid these challenging times.
“Following the announcement made by Mindef on May 7, 2021, the group will present its plan on reviving the LCS project once it receives an official confirmation [of] the government’s approval.
“As we continue to face the Covid-19 pandemic and its adverse effects to the global and national economies, 2021 may be another challenging year for businesses including those in the defence/security and marine sectors. While the group takes a cautious view of our prospects in 2021, we are committed to take the group back to the path of profitability and deliver value to our shareholders,” it said.
Shares in BHIC closed 4.17% or two sen lower at 46 sen, valuing it at RM114.29 million. It saw 71,600 shares done.
