Deleum Berhad (“Deleum” or the “Group”), a provider of a diverse range of supporting specialised products and services to the oil and gas industry, reported a third quarter pre-tax profit of RM39.4 million.
The 21.9% increase or RM7.1 million for the nine months ended 30 September 2019 compared to the corresponding period of last year was achieved on the back of a solid growth in revenue across all segments. Revenue accumulatively rose to RM636.2 million, an increase of 50.3% or RM212.9 million, compared to the previous corresponding period.
For the third quarter of financial year ending 2019, Deleum recorded a 69.0% hike in revenue or RM121.1 million to RM296.5 million compared to the previous corresponding period on the back of higher sales across all segments. The Group also recorded a 64.8% increase in the quarterly pre-tax profit of RM23.5 million against the corresponding period last year, an increase of RM9.2 million.
For the segmental results in the third quarter, Power and Machinery (P&M) segment recorded a higher pre-tax profit of RM18.8 million, a rise of 89.2% or RM8.9 million compared to the corresponding quarter. This was in tandem with the significant increase in revenue achieved in the quarter, which amounted to 98.8% or RM89.3 million increase as compared to the corresponding quarter of the previous year. The strong deliveries in exchange engines, higher valve and flow regulator services, increase in sales from retrofit projects, turbine parts, repair services, third party sales and lower net losses on MYR against USD foreign exchange have collectively contributed to the higher revenue and profits.
The Oilfield Services (OS) segment saw an improvement in its revenue by 4.9% or RM1.7 million to RM37.1 million against the corresponding quarter. This was mainly due to contribution from Gas Lift Valve services and better operating profits from Specialty Chemical and Well Stimulation as well as higher work orders from well intervention and enhancement services. The segment results fell to a profit of RM0.2 million compared against the corresponding quarter profit of RM3.6 million due to the downward pressure on margins from local slickline operations.
The Integrated Corrosion Solution (ICS) segment saw a RM3.4 million, or 1,949.1% jump, in its pre-tax profit against the corresponding quarter, on the back of higher work order deliveries and better sales mix with higher margins from the Sponge-Jet Blasting business. Revenue grew 60.6%, or RM30.0 million, to RM79.5 million as a result of the robust activity levels from on-going projects with strong momentum in sales growth from Sponge-Jet Blasting business via the renewal of the Pan Malaysia Painting and Blasting Contracts coupled with higher works performed on its Maintenance, Construction and Modification services contract.
For the remaining of the financial year ending 31 December 2019, Deleum expects the P&M segment to remain as the largest contributor to the profitability of the Group, ICS segment to maintain its financial performance while OS segment will focus on fulfilling all of its contractual requirements and working on margin improvement via stringent cost management.
Deleum will continue to remain cautious on its financial outlook by focusing on its business deliverables, cost efficiencies and effectiveness, and performance excellence across all segments.