- Revenue up 20.1% to RM123.4 million, driven by higher sales activities in the Power and Machinery segment
- Power and Machinery segment’s profit before tax jumps 146.8% to RM16.4 million due to higher operating margin
KUALA LUMPUR, 30 MAY 2023 - Leading oil & gas (O&G) services provider Deleum Berhad (“Deleum” or the “Group”), reported a net profit of RM9.1 million in the first quarter ended 31 March 2023 (1Q23), up 12.5% from last year same quarter, largely due to higher revenue and profitability from the Power and Machinery (P&M) segment.
P&M segment revenue increased by 58.2% to RM97.6 million in 1Q23, from RM61.7 million in the corresponding quarter last year, on increased sales activities in the segment. The robust growth in the P&M segment resulted in a 20.1% hike in 1Q23 group revenue to RM123.4 million from RM102.8 million previously.
Power and Machinery (P&M) Segment
The increased revenue from the P&M segment in 1Q23 was due to higher number of exchange engines delivered, retrofit projects, and increased sales activities from the control and safety valves and flow regulator services.
Simultaneously, profit before tax for the segment surged 146.8% to RM16.4 million from RM6.6 million a year ago, setting a new high for the first-quarter performance. This was due to better operating margins, gain on foreign exchange of RM2.8 million, and fair value gain on forward foreign currency exchange contracts of RM1.4 million.
The segment continued to be the largest revenue contributor to the Group, making up 79.1% of the Group revenue of RM123.4 million.
Oilfield Services (OS) Segment
OS segment revenue fell 18.5% in 1Q23 to RM22.8 million from RM28.0 million the previous year, primarily due to lower activities from its slickline services in West Malaysia and gas lift valve contract. The lower business activities from the segment resulted in a loss before tax of RM2.2 million for 1Q23, compared to a profit before tax of RM3.8 million the previous year.
Integrated Corrosion Solution (ICS) Segment
Lower maintenance activity levels in the Sponge-Jet Blasting (SPJ) business in Indonesia and lower contribution from the Maintenance, Construction, and Modification (MCM) projects led to a 77.9% decrease in ICS segment revenue in 1Q23 to RM2.9 million, compared to RM12.9 million previously. In tandem, the segment reported a lower profit before tax of RM0.04 million in 1Q23 from RM1.2 million previously.
“We kicked-off 2023 with vigorous activities in the P&M segment, delivering solid first-quarter results on the top and bottom lines. This robust performance reflects our strong market position in the O&G sector. Looking ahead, we are optimistic that we will be able to maintain our momentum throughout the rest of 2023, given the stablising oil prices, OPEC’s recent cuts in production and the reopening of China's economy post-Covid. We anticipate to benefit from the O & G industry’s optimism in capital expenditure spending.” Rao Abdullah Group Chief Executive Officer, Deleum Berhad.
The Group maintained its net cash position as at end of 1Q23, with an improved cash and bank balances of RM207.7 million exceeding total borrowings of RM6.3 million. The strong balance sheet was attributed largely to better working capital management, coupled with positive operating cashflows of RM47.0 million as a result of the improved profitability and healthy collections during the quarter. As at 31 March 2023, shareholders’ equity largely maintained at RM384.8 million.
To date, Deleum’s orderbook stands positively at RM551.9 million, which consists of works and equipment mostly to be delivered within 12 months.
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About Deleum Bhd
Deleum Berhad is an investment holding company and through its subsidiaries, provides a diverse range of supporting specialised products and services to the oil and gas industry, particularly in the exploration and production sector. Its range of products and services is distinguished according to its three core business segments – Power and Machinery, Oilfield Services and Integrated Corrosion Solutions. Deleum is listed on the Main Market of Bursa Malaysia.
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