Kuala Lumpur, 18 Aug 2016
Deleum Berhad (“Deleum” or the “Group”), a diverse range of supporting specialised products and services provider to the oil and gas industry, recorded a second quarter pre-tax profit of RM11.3 million, bringing the pre-tax profit up to RM22.8 million for the half-year ended 30 June 2016.
The decrease in pre-tax profit from RM36.0 million in the corresponding period to RM22.8 million in current 6-month period was mainly attributable to lower contributions from Power andMachinery segment, Oilfield Services segment and the share of results from associate companies.
The Group’s Power and Machinery (P&M) segment recorded a lower segment results of RM7.6 million in the second quarter ended 30 June 2016 (Q2FY2016) as compared to RM14.7 million in the corresponding quarter attributable to lower revenue contribution from exchange engines, retrofit projects and parts and repairs.
The Oilfield Services (OS) segment results was lower at RM2.9 million in Q2FY2016 as compared to RM8.4 million in the corresponding quarter on the account of reduced revenue and margins from slickline activities as customers cut back on operating expenses in reaction to the low oil prices.
Whereas, Integrated Corrosion Solution (ICS) segment registered a marginally higher segment results of RM1.1 million in Q2FY2016 as compared to RM1.0 million in the corresponding quarter due to improved work orders for corrosion protection and maintenance stemming from the Pan Malaysia Blasting Contracts.
The oil price volatility is expected to persist in the near future and underscores the difficult trading conditions faced by the industry participants following the collapse of the oil prices. Against this backdrop, the Group suffered a marked contraction in business activities, which is reflected in its weaker quarterly financial performance. However, despite the negative outlook, Deleum expects the level of the Group’s operating activities for the rest of the financial year be maintained based on contracts in hand.
Deleum has declared a first interim single tier dividend of 1.25 sen per ordinary share on 400,000,000 ordinary shares of RM0.50 each. The dividend will be payable to shareholders on 26 September 2016.