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 higher pre-tax profit of RM13.3 million for its second quarter 2018 (Q2FY18) bringing the Group’s pre-tax profit for the half-year ended June 30, 2018 to RM18.1 million, up 17.7% from the corresponding year.
The Group’s half yearly revenue strengthened to RM247.8 million as compared to the corresponding period of RM196.4 million supported by growth across all reportable segments.
Pre-tax profit for the Group’s Power and Machinery (P&M) segment for the second quarter was up RM4.7 million to RM11.1 million, on the back of a revenue growth of 23.0% to RM79.5 million against the corresponding period. This was driven mainly by higher work orders from exchange engines and increased commission income earned. Year-to-date, P&M’s results improved by RM5.6 million to RM16.3 million compared to the half-year ended 2017.
The Oilfield Services (OS) segment’s results for the half-year ended 30 June 2018 was lifted by RM5.3 million on the back of an increase of RM2.9 million in revenue from slickline related activities, particularly in Peninsular Malaysia notwithstanding the segment’s revenue for the second quarter was down by 1.6%, or RM0.5 million, compared with the corresponding quarter.
In Integrated Corrosion Solution (ICS), the segment’s revenue of RM28.4 million for the second quarter more than double that of the corresponding quarter in 2017. This was driven largely by the additional revenue generated from the Maintenance, Construction and Modification (MCM) services contract but offset by the slowdown in revenue from the Pan Malaysia Blasting Contract due to contract expiry. However, the higher costs incurred to close out the Pan Malaysia Blasting Contract and to support the fulfilment of the MCM contract saw the segment reporting a fall of RM7.4 million in pre-tax profit for the cumulative quarters against the corresponding period.
Deleum has declared a first interim single tier dividend of 1.25 sen per ordinary share on 401,125,700 ordinary shares of 1.00 sen each for the financial year ending 31 December 2018. The dividend will be payable to ordinary shareholders on 25 September 2018.
Looking ahead, while the prospect of strong oil prices has led to higher levels of spending in the sector, there are little signs of easing in the push for cost efficiencies and effectiveness as major customers continue to exercise tight fiscal disciplines.
As such, Deleum will still maintain its focus on meeting its mission of sustainability and resilience by enhancing capabilities across all business segments alongside strong project execution and rigorous budget management.