Kuala Lumpur, 22 August 2017
Deleum Berhad (“Deleum” or the “Group”), provider of a diverse range of supporting specialised products and services to the oil and gas industry, recorded an improved second quarter pre-tax profit of RM11.4 million (first quarter pre-tax profit of RM3.9 million).
This improvement brought the Group’s pre-tax profit to RM15.3 million for the half-year ended 30 June 2017 (Q2FY2017). Nevertheless, business activities in the oil and gas market is expected to remain subdued in view of the uncertainty in crude oil prices.
The Power and Machinery (P&M) segment recorded a second quarter pre-tax profit of RM6.4 million as compared to RM7.6 million in the corresponding quarter of 2016, and this was further exacerbated by a foreign exchange loss of RM3.7million in the period under review. On a cumulative basis, the half-year pre-tax profit of this segment amounted to RM10.7 million (RM17.6 million in Q2FY2016 )
The Oilfield Services (OS) segment turned in a higher pre-tax profit of RM4.9 million (Q2FY2016: RM2.9 million) for the second quarter, just marginally lower at RM5.1 million (Q2FY2016:RM5.2 million) for the half year. This was due to the improved utilisation in slickline activities and well intervention and enhancement services as well as lower finance costs on the borrowings for the oilfield assets.
The Group’s Integrated Corrosion Solution (ICS) segment’s pre-tax profit reduced from RM1.1 million to RM0.9 million in the second quarter as compared the corresponding quarter in 2016 but recorded a year to date improved result from RM0.4 million to RM0.9 million for the half year period. This was due to improved margins on work orders on the back of operational efficiencies and lower costs to serve.
To mitigate the effects of the on-going challenging conditions, the Group will continue to concentrate on its core businesses, operating efficiencies and managing cash flow. Deleum is expected to sustain the current levels of business activities with the work on hand and potential work orders based on outstanding tenders, although margins are expected to be tight.
Deleum has declared a first interim single tier dividend of 1.00 sen per ordinary share on 400,195,300 ordinary shares for the financial year ending 31 December 2017. The dividend will be payable to shareholders on 26 September 2017.