A lower pre-tax profit as compared to RM71.2 million in last year was due to lower contributions from the Power and Machinery segment and associates, relieved by stronger performance from both the Oilfield Services and Integrated Corrosion Solutions segments.
The results for the Power and Machinery (P&M) segment declined by RM27.9 million to RM35.9 million in FY2016 affected by the slowdown in revenue, a one-off restructuring cost for the rotary business and lower reported foreign exchange gain.
The Oilfield Services (OS) segment’s results increased by 50.9% year-on-year to RM12.5 million despite a slight reduction in revenue, mainly due to lower finance costs through paring down of borrowings raised in prior years as well as a favourable foreign exchange differences as compared with a foreign exchange loss recorded last year.
The Integrated Corrosion Solution (ICS) segment registered a commendable growth of 326.1% in its segment results to RM4.1 million in FY2016 due to improved margins on work orders for corrosion protection and maintenance on the back of operational efficiencies and cost disciplines.
In line with its dividend policy, Deleum has declared a second interim single tier dividend of 2.25 sen per ordinary share in announcing its financial results for FY2016 payable to shareholders on 28 March 2017. Combined with the first interim single tier dividend of 1.25 sen per ordinary share, this will bring the total dividend in respect of FY2016 to 3.50 sen per ordinary share totaling RM14.0 million based on 400 million ordinary shares.
Despite the better oil prices, the outlook is still likely to remain cautious. The Group will continue to focus on core activities, tighten operating efficiencies, conserve free cash and to maintain its dividend policy.