News Release

Deleum Announces Strong 1st Quarter Results

Kuala Lumpur, 21 May 2014

- 40.8% Hike In Pre-Tax Profit

Deleum Berhad (“Deleum” or the “Group”), a provider of diverse range of supporting specialised products and services to the oil and gas industry, posted a 40.8% increase in pre-tax profit to RM15.7 million for its 1st quarter of the financial year ending 31 December 2014 (Q1FY2014) compared to RM11.1 million in the corresponding quarter mainly due to better performance from the Power and Machinery and Oilfield Services segment. This commendable result was also achieved on the back of an increase in revenue from RM86.5 million (Q1FY2013) to RM102.2 million, an 18.1% increase as compared to the corresponding quarter.

The Oilfield Services segment recorded a result of RM5.8 million in Q1FY2014, an 88.6% or RM2.7 million increase as compared to the corresponding quarter of RM3.1 million. This was largely due to increased activities from wireline services, lower marketing expenses and higher foreign exchange gains. The improved result was in line with the increase in the revenue generated from this segment, which recorded a 41.7% growth, from RM17.6 million (Q1FY2013) to RM24.9 million.

Despite experiencing a marginal drop of 0.5% in the Power and Machinery segment’s revenue, the result of the segment improved by 43.6% from RM7.1 million (Q1FY2013) to RM10.1 million in Q1FY2014. The improved result was largely attributable to higher margin earned from sales of gas turbines packages, field service representatives and retrofit projects.

Whilst the Maintenance, Repair and Overhaul segment’s revenue increased by RM8.6 million in this quarter, the segment recorded a loss of RM0.5 million compared to a loss of RM0.1 million in the corresponding quarter, attributed to higher operating expenses which include provision of doubtful debts and rising staff costs.

The Group Managing Director, Nan Yusri bin Nan Rahimy, said: “The domestic oil and gas industry continues to be robust with high-level of activities. As a Group, Deleum is well-positioned to be directly involved and is able to participate in many of the oil and gas related activities.”

“Furthermore, in the previous financial year, the Group secured multiple contracts for the provision of slickline equipment and services as well as long-term service agreements to provide aftermarket turbomachinery maintenance services for Solar gas turbines in Malaysia to the Production Sharing Contract operators. These awards will further strengthen the sustainability of our recurring services going forward.”

Looking ahead in the year, Nan Yusri cautioned: “Competition will be intense and the cost of doing business will rise, in particular staff related cost and tightened inflationary pressure. We are cognisant of the challenges and have taken necessary measures to enhance our competitive position.”