- Group profit attributable to shareholders increased to RM8.1 million
- Group revenue improved to RM102.8 million
- Improved performance by Oilfield Services and Integrated Corrosion Solutions segments contributed to a stronger overall Group performance
KUALA LUMPUR, 27 MAY 2022 - Deleum Berhad (“Deleum” or the “Group”), a provider of a diverse range of supporting specialised products and services to the oil and gas industry, posted a 45 per cent increase in group profits to RM8.1 million in the first quarter (“Q1”) for financial year ending 31 December 2022 (“FY2022”).
The increase in profit attributable to shareholders to RM8.1 million from RM5.6 million in the corresponding quarter of financial year ended 31 December 2021 (“FY2021”), was achieved on the back of higher Q1 FY2022 revenue of RM102.8 million, an 8.5 per cent improvement from Q1 FY2021 due to higher revenue reported across all business segments.
Stronger performances by its Oilfield Services and Integrated Corrosion Solution segments contributed to the better financial performance as a result of higher sales activities and job deliveries during the quarter. This, however, was offset by a slightly reduced performance from the Power and Machinery segment.
The Group’s cash and bank balances in Q1 FY2022 is higher at RM199.6 million compared to RM192.7 million as at 31 December 2021 as the operating and investing activities respectively generated positive cash inflow of RM14.8 million and RM5.4 million in Q1 FY2022.However, during the quarter, the Group’s bank borrowings reduced from RM30.3 million to RM23.1 million and dividend payments of RM6.3 million were made to shareholders and non-controlling interests.
Segmental Review
Power and Machinery (“P&M”)
Revenue increased by 5.5 per cent to RM61.7 million in Q1 FY2022 due to higher business activities recorded in the gas turbine after sales business. However, pre-tax profit in the P&M segment reduced by 11.8 per cent to RM6.6 million in Q1 FY2022 from RM7.5 million due to higher operating costs.
Oilfield Services (“OS”)
The OS segment revenue in Q1 FY2022 remained stable with higher activities recorded by its gas lift valve services, slickline services in West Malaysia region and chemical sales which was however offset by the reduced slickline services activities in the East Malaysia region and the well intervention and enhancement services unit.
Pre-tax profit improved significantly to RM3.8 million in Q1 FY2022 from RM0.6 million in Q1 FY2021 partly due to the reversal of an impairment made for trade receivable amounting to RM2.1 million.
Integrated Corrosion Solution (“ICS”)
Revenue in the ICS segment was up by 58 per cent to RM12.9 million in Q1 FY2022 compared to RM8.2 million in Q1 FY2021 with better job deliveries and higher maintenance activity levels for both its Sponge-Jet Blasting business in Indonesia as well as the Maintenance, Construction and Modification services project in Malaysia.
On the back of the higher increase in revenue, Q1 FY2022 pre-tax profit improved 6-fold to RM1.2 million from RM0.2 million in the corresponding quarter. This is also attributable to the various cost savings initiatives undertaken to reduce its operating costs.
Prospects
Business activities are expected to pick up following its transition into the endemic phase as the country eases restrictions and opens borders. Higher commodity price is also expected to spur business activities in the Oil and Gas sector as the Oil and Gas operators resume their spending.
Against this backdrop, the Group expects to see stability in its performance and will continue to focus on growth by exploring new markets, investing in new product lines and geographical expansion, pursuing opportunities in both the upstream and downstream sectors. The Group will also keep track of cost management in an increasingly inflationary environment.
###
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.