(603) 2295 7788
27 May 2019

Deleum records Q1 2019 profit attributable to equity holders of the company of RM2.8 million

Deleum Berhad (“Deleum” or “the Group”), a provider of diverse range of supporting specialised products and services to the oil and gas industry, reported a 100.6% higher profit attributable to equity holders of the Company (PATANCI) of RM2.8 million for its first quarter ended 31 March 2019 (Q1FY2019), compared to RM1.4 million reported in the corresponding quarter 31 March 2018 (Q1FY2018).

The quarter saw a rise in the Group’s revenue of 17.5%, or RM19.0 million, to RM127.5 million on the back of higher revenue contributions across all reportable segments with a strong revenue growth booked by the Integrated Corrosion Solution (ICS) segment mainly from its Maintenance, Construction and Modification (MCM) project.

Power and Machinery (P&M) segment saw a marginal decrease in its pre-tax profit of 4.0% to RM4.9 million against the corresponding quarter. Its revenue rose 7.5%, or RM4.9 million, to RM69.9 million in Q1FY2019 against the corresponding quarter of RM65.0 million. This is attributed to the increase in demand for valves and flow regulator services, turbine parts and repair, and increase in revenue contribution from retrofit projects.

The P&M segment will continue to provide after sales support and services to its existing installed turbines base customers and at the same time continues working with its business partners to provide additional products and services to its customers.

The Group’s Oilfield Services (OS) segment recorded a 16.3% hike, or RM4.4 million increase in revenue compared to the corresponding quarter Q1FY2018, due to stronger work orders from well intervention and enhancement services. The segment’s pre-tax profit however declined by RM0.2 million, or 5.4% to RM4.0 million against the same quarter last year due to weaker margins earned from slickline activities.

Deleum’s OS segment has maintained its market leader position in the provision of slickline services and is focusing its efforts to mobilise all its contracts following its successful slickline contract wins with new and existing customers in 2018. The segment is also practising stringent cost management to mitigate the compressed margin pressures faced.

The ICS segment recorded a sizeable rise of RM9.7 million, a 60.2% hike in revenue to RM25.7 million compared to the corresponding quarter attributed by additional revenue generated from the MCM contract. The ICS segment, however, recorded a loss of RM7.4 million due to pressure on margins with higher operations cost incurred to support the MCM contract.

The ICS segment will concentrate its efforts to improve its financial performance for the year. Various initiatives and measures are underway to improve the financial performance of the segment in the upcoming quarters.

Moving forward, the oil and gas environment is expected to remain challenging in 2019. Deleum would still remain cautious due to the market volatility and shall continue to enhance integration efforts across all core businesses by leveraging on the Group’s financial strengths and resources.

Additional Info

  • Publisher: Company Announcement
  • Banner: Banner
  • Type: News Release