- Robust growth in the Power and Machinery segment, coupled with significant rebound in Oilfield Integrated Services segment, drives strong 2Q24 results
KUALA LUMPUR, 21 August 2024 - Leading oil & gas (O&G) services provider Berhad’S pre-tax profit (PBT) soared 104.6% to RM37.5 million in the second quarter ended 30 June 2024 (2Q24) from RM18.3 million in the previous corresponding quarter, mainly driven by robust growth in the Power and Machinery (P&M) segment and a significant rebound in Oilfield Integrated Services (OIS) segment.
Growth in both segments contributed to a 20.1% increase in 2Q24 group revenue to RM225.9 million from RM188.1 million previously. Consequently, net profit surged 130.0% to RM22.4 million in 2Q24 from RM9.7 million last year.
P&M continued to be the largest contributor to the Group’s 2Q24 revenue, making up 78.2%, with the balance coming from the OIS segment.
The Group’s OIS businesses demonstrated significant progress in 2Q24 across multiple areas. Following the successful completion of a sludge treatment pilot project, the segment secured a longer-term contract and potentially will have future similar engagements with other oil terminals which may have the same needs and requirements. Additionally, the solid control operations remain on track with a mix of development and drilling operations throughout the year, coupled with the promising expanding business in Indonesia. These achievements are expected to contribute to sustained momentum in the upcoming quarters.
For the six months ended 30 June 2024 (1H24), group PBT rose 63.0% to RM54.8 million from RM33.6 million in the previous period. 1H24 net profit climbed 67.7% to RM31.6 million from RM18.9 million previously, while revenue increased by 24.3% to RM387.3 million from RM311.5 million previously.
“I am very pleased with our second quarter performance and year-to-date results. We are firing on all cylinders, as evidenced by the strong performance of our OIS segment and the consistent growth of our P&M segment. We expect our OIS segment to continue performing well as we move forward. Our strategic focus on growth and operational excellence is bearing fruit. Our strategy involves prioritising quality mergers and acquisitions, investing in innovation and technology, and exploring collaborations aligned with our goals. With a strong orderbook and an improving industry outlook, we remain optimistic in achieving sustainable growth.” - Rao Abdullah, Group Chief Executive Officer, Deleum Berhad
Power and Machinery (P&M) Segment
Revenue from the P&M segment grew 13.7% to RM176.6 million in 2Q24, from RM155.3 million in the previous quarter. The growth was driven by higher retrofit income, control and safety valves and flow regulator services, and commission income from mechanical and processes business. The segment’s PBT rose 76.7% to RM30.6 million from RM17.3 million previously. In tandem, the strong second quarter performance contributed to a better showing in 1H24, with the segment reporting revenue of RM306.1 million and PBT of RM52.4 million, versus RM253.0 million and RM33.7 million respectively in the previous period.
Oilfield Integrated Services (OIS) Segment
The Group combined the reporting of the Oilfield Services and Integrated Corrosion Solution segments into a new segment, Oilfield Integrated Services. The new structure aims to reflect clearer financial reporting and enhance transparency by segregating the service-centric businesses, Oilfield Services and Integrated Corrosion Solution, and the specialised products and services-based businesses, Power and Machinery.
The OIS segment delivered an improved performance in 2Q24 with PBT surging more than tenfold to RM6.9 million from RM0.6 million in the previous quarter. This growth was largely due to higher business activities in slickline services in East Malaysia, asset-integrated solution services, and solid control services. Revenue for the segment also rose by 50.7% to RM49.1 million, compared to RM32.6 million previously. The OIS segment’s revenue for 1H24 increased by 38.8% to RM80.9 million, up from RM58.3 million in the prior year. Meanwhile, there was a positive swing in segment results which reported a profit of RM3.5 million against a loss of RM1.5 million for the same period last year.
The Group’s cash and bank balances, together with the placements of funds in investment securities, stood at RM 237.0 million as at the end of the second quarter of 2024 as compared to RM215.9 million as at 31 December 2023. Shareholders’ equity increased to RM431.8 million as at 30 June 2024 from RM413.4 million at the end of 2023. Currently, Deleum’s order book remains robust at RM570.5 million, with the majority of works and equipment scheduled for delivery within the next 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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