KUALA LUMPUR, 24 AUGUST 2021 - Deleum Berhad’s (“Deleum” or the “Group”), a provider of a diverse range of supporting specialised products and services to the oil and gas industry, posted improved half-year results, turning around to record a profit of RM7.2 million against a loss of RM9.0 million recorded in the corresponding period.

The stronger financial performance for the 6-month period ended 30 June 2021 was despite a 20.3 per cent lower revenue of RM231.1 million as compared to RM290.0 million of the corresponding period. The lower revenue was on the account of depressed revenue recorded by the Power and Machinery (P&M) and Integrated Corrosion Solution (ICS) segments.

The Group’s profits attributable to equity holders of the Company swung back to a profit due to stronger operating margins recorded on the back of a positive change in sales mix of products and services, lower write-offs made on inventories and other receivables from the Oilfield Services segment, favourable movement in foreign exchange differences as well as non-occurrence of the one-off impairment charges on the slickline operating assets and a corporate long-term other receivable of RM10.6 million and RM1.7 million respectively reported in the corresponding period last year.

Revenue of the P&M segment decreased by 14.4% to RM157.9 million and profit before tax fell by 10.1 per cent to RM16.0 million as a result of weaker sales on turbines parts and valves and flow regulator services. However, the favourable movement in Ringgit against US Dollar chalked up a net gain of RM1.2 million (loss of RM1.8 million in the corresponding period), partially cushioning the effect of the weaker sales.

For the Oilfield Services (OS) segment, revenue increased by 4.9% to RM54.0 million and segment results too improved with a lower loss of RM328,000 (loss of RM20.3 million in the corresponding period). This was due to the improved revenue recorded following higher slickline asset utilisation. The lower loss during the period under review was in line with the higher revenue, improved operating margins, absence of inventory write-offs as well as lower impairment made on its trade receivables and contract assets. The corresponding half year segment results were adversely impacted by the non-recurring impairment charge made on its slickline operating assets of RM10.6 million.

Revenue for the ICS segment declined 64.8 per cent to RM19.0 million with lower activity levels in maintenance services for both of its Maintenance, Construction and Modification and local Sponge-Jet Blasting operations. Higher operating margins coupled with lower overhead expenses cushioned the set back of decline in revenue for the segment to incur a lower loss before tax at RM3.5 million compared to RM5.6 million previously.

Deleum Group predominantly operates in the Malaysian market. With the higher vaccination rate, it expects less encumbrances in the quarantine requirements for the offshore crew. This will improve the utilisation of the Group’s manpower and equipment. The current oil price level may also bring positive impact to the Group. Even though the December monsoon season may result in potential decrease in activities, Deleum is cautiously optimistic in its operating performance for the remainder of the year.

Ramanrao Abdullah

Group Chief Executive Officer

Ramanrao bin Abdullah (Malaysian, aged 61, Male) was appointed as Group Chief Executive Officer of Deleum on 1 July 2021 and appointed as Director to the Board on 8 July 2021.

He holds a Bachelor of Accounting from University of Malaya and a Master in Business Administration from University of Leicester, United Kingdom. He is a member of the Institute of Chartered Accountants in England and Wales (ICAEW).

Mr Ramanrao has built a career in the oil and gas industry spanning more than 26 years, all of which have been with Halliburton. His various roles in the company included those in the Finance, Business Development and Operation workstreams before assuming the position of Chief Executive Officer of Halliburton Asia Pacific in 2014.  Following this, he was appointed to a newly created role as Vice President of Business Development for Asia Pacific and Asian National Oil Companies for their Global Operations in 2018.

Prior to his career in the energy sector, he was a practicing accountant in an audit firm in Bath, England for six years. 

A leading figure in the industry, Mr Ramanrao  previously served on the Research Advisory Council (RAC) of Universiti Teknologi PETRONAS (UTP) and continues his association with the university as an Adjunct Lecturer since 2019. He previously also served as a member of the Advisory Council for Society of Petroleum Engineers (SPE) Asia Pacific.

Mr Ramanrao also currently serves as a Council Member of Malaysian Gas Association (MGA), an Executive Committee Member of the International Petroleum  Technology Conference (IPTC) 2025 and an Advisory Committee Member for Offshore Technology Conference (OTC) Asia 2024.

Mr Ramanrao’s extensive experience in both the corporate and regulatory framework of the oil and gas industry, not just in Malaysia and regionally but also globally, as well as his training as a chartered accountant, has equipped him with a comprehensive range of diverse competencies relevant to this sector.

Other than the Company, he is not a Director of any other public company or listed issuer.
 

Ramanrao Abdullah

Group Chief Executive Officer

NATIONALITY / AGE /GENDER
Malaysian / 61/ Male

DATE OF APPOINTMENT
1 July 2021

ACADEMIC / PROFESSIONAL QUALIFICATIONS

• Master in Business Administration, University of Leicester, United Kingdom
• Members of Institute of Chartered Accountants in England and Wales (ICAEW)
• Bachelor of Accounting, University of Malaya, Malaysia

WORKING EXPERIENCE

He joined Deleum Berhad on 1 July 2021 as Group Chief Executive Officer.

He has built a career in the oil and gas industry spanning more than 25 years, all of which have been with Halliburton. His various roles in the company included those in the Finance, Business Development and Operation workstreams before assuming the position of Chief Executive Officer of Halliburton Asia Pacific in 2014. Following this, he was appointed to a newly created role as Vice President of Business Development for Asia Pacific and Asian National Oil Companies for their Global Operations in 2018.

Prior to his career in the energy sector, he was a practicing accountant in an audit firm in Bath, England for six years.

A leading figure in the industry, he previously served on the Advisory Council of Universiti Teknologi PETRONAS (UTP) and continues his association with the university as an adjunct lecturer since 2019. He is also a member of the Advisory Council for SPE (Society of Petroleum Engineers) Asia Pacific. He currently serves as a Council Member of Malaysian Gas Association (MGA), an Executive Committee Member of the International Petroleum  Technology Conference (IPTC) 2025 and an Advisory Committee Member for Offshore Technology Conference (OTC) Asia 2024.

His extensive experience in both the corporate and regulatory framework of the oil and gas industry, not just in Malaysia and regionally but also globally, as well as his training as a chartered accountant, has equipped him with a comprehensive range of diverse competencies relevant to this sector.

PRESENT DIRECTORSHIP

(i) Listed Entity: Nil
(ii) Other Public Companies: Nil

Mohammad Kamal bin Md Yosof

Chief Executive Officer Deleum Technology Solutions Sdn. Bhd.

NATIONALITY / AGE /GENDER
Malaysian / 59 / Male

DATE OF APPOINTMENT
15 April 2021

ACADEMIC / PROFESSIONAL QUALIFICATIONS
Bachelor of Civil Engineering Southern Illinois University, USA

WORKING EXPERIENCE
Joined Deleum Technology Solutions Sdn Bhd  (formerly known as Deleum Primera Sdn Bhd) in 2021 as Chief Operating Officer.
Prior to joining Deleum Technology Solutions Sdn. Bhd., he had more than 30 years working experience in Oil & Gas industry.

PRESENT DIRECTORSHIP
(i) Listed Entity: Nil
(ii) Other Public Companies: Nil

KUALA LUMPUR, 27 May 2021 - Deleum Berhad (“Deleum” or the “Group”), a provider of diverse range of supporting specialised products and services to the oil and gas industry, saw its pre-tax profit improved significantly to RM9.1 million for its first quarter ended 31 March 2021 (Q1FY2021) from RM4.1 million in the corresponding quarter of 2020. This was despite a 36.5% lower revenue of RM96.1 million compared with the previous corresponding quarter.  

The Group’s higher profit was due to improved operating margins recorded across all business segments on an account of better sales composition and lower operational costs. Various cost savings initiatives undertaken by the Group, a favourable Ringgit/US Dollar foreign exchange movement, and the absence of impairment for doubtful debts as compared to the corresponding quarter of 2020 were among the contributory factors of the higher profit.

The decline in revenue was a result of the lower sales activities by the Power and Machinery and Integrated Corrosion Solution segments. These were mainly due to the slowdown in the maintenance activity levels on both Maintenance, Construction and Modification services and the Sponge-Jet Blasting businesses in the Integrated Corrosion Solution segment coupled with the decline in the aftermarket turbomachinery maintenance services within the Power and Machinery segment.

Segmental Performance 

Pre-tax profit for the Group’s Power and Machinery (P&M) segment rose 13.9% to RM7.2 million from RM6.4 million in the last corresponding period despite the lower revenue recorded. This was attributed to the stronger operating margins earned from the better sales mix and lower operational costs as well as a favourable movement in foreign exchange differences.

The Oilfield Services (OS) segment saw a turnaround in results with a profit of RM0.6 million after an impairment of a trade receivable dragged it into the red in the corresponding quarter, resulting in a loss of RM1.3 million. The segment’s revenue rose marginally by 0.8% to RM27.9 million against the corresponding quarter of RM27.7 million. The higher revenue was due to the increase in the activity levels of jobs performed from well intervention and enhancement services in East Malaysia coupled with higher sales on the gas lift valve services.

The Integrated Corrosion Solution (ICS) segment turned in a profit of RM0.2 million against the corresponding quarter loss of RM1.4 million as a result of better operational margins earned from better sales mix and lower operating expenses.  The segment’s revenue fell by 68.6% to RM8.2 million compared against the corresponding quarter revenue of RM26.1 million in view of overall lower contract orders and job deliveries in its Malaysian operations. The decrease was however mitigated by the stronger performance of the Sponge-Jet Blasting business in Indonesia.

Prospects

The COVID-19 situation continues to overshadow the economy as the Malaysian Government imposed the third Movement Control Order to curb the spread of the virus. Hence, most economic activities are expected to be slow. 

The ongoing situation will inevitably have a negative impact on Deleum’s businesses. Deleum remains committed in ensuring businesses remain sustainable and stakeholders’ value preserved under such volatile environment. The Group will continue its operations and costs optimising initiatives throughout the financial year 2021.

KUALA LUMPUR, 29 MARCH 2021 - 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 creditable financial results for the year ended 31 December 2020 (FY2020), resulting in a declaration of a first interim dividend of 1.00 sen per ordinary share on its 401,553,500 ordinary shares for the FY2020, in line with the Group’s dividend policy. The dividend will be payable on 15 April 2021.

In FY2020, the global market which was hit by the unprecedented outbreak of Covid-19 pandemic, affected the global energy demand and oil prices adversely. Nevertheless, Deleum managed to deliver stronger operational performance by focusing on its operational efficiencies, cost and cash management initiatives and performance excellency across the Group. These focused enhanced measures undertaken in response to the unfavorable market conditions have resulted in improved profitability achieved by the Group in the second half of the financial year. For FY2020, Deleum has announced a profitable performance, with reported total revenue of RM592.1 million and profit before tax of RM27.3 million, as compared to a revenue of RM868.3 million and profit before tax of RM55.1 million reported in the corresponding period.

The Group’s profitability was aggravated by non-recurring one-off impairment charges on its operating assets totaling RM30.3 million, an impairment charge made on its long-term corporate other receivables of RM1.2 million and write-offs made on inventories of RM3.0 million. Excluding these impairment charges and write off expenses, the Group’s operating profit would have increased by 13.8% compared to the corresponding year, despite lower revenue recorded during the year but mitigated by improved margins and lower operating expenses incurred. 

Notwithstanding the above-mentioned challenges, the Group’s also continued to deliver a healthy balance sheet position with cash and bank balances standing strong at RM219.6 million against the previous year’s RM160.0 million.

Revenue for the Power and Machinery segment declined by 23.3%, to RM372.8 million against the corresponding year’s RM486.2 million. However, the combination of stronger margins from better sales composition and lower losses in foreign exchange differences helped cushion the performance of this business segment from the revenue reduction. The segment’s pre-tax results fell 9.6% to RM45.0 million from RM49.8 million in the corresponding year.

Oilfield Services’ revenue dropped by 24.1% to RM109.4 million against previous year’s RM144.2 million. It reported a loss of RM21.8 million as compared to a pre-tax profit of RM0.9 million attributable mainly due to one-off impairment charges of RM15.1 million, on its operating assets, provision for doubtful debts of RM1.0 million on trade receivables and write-offs of RM1.8 million and RM0.5 million on its inventory and other receivables, respectively.  

The Integrated Corrosion Solution segment reported a revenue of RM109.4 million, from RM237.3 million in the previous reporting year.  It was affected by lower jobs performed for both of its Maintenance, Construction and Modification and Sponge-Jet Blasting projects. Despite lower revenue and one-off impairment charges of RM15.2 million on its operating assets, the segment results reported a stronger profit of RM4.1 million compared to RM1.8 million previously.  This was on the back of higher project margins earned with better sales mix, lower foreseeable losses recognised and a decrease in the overhead costs recorded as a result of various cost savings initiatives undertaken in FY2020.

Looking ahead, Deleum anticipates a delicate recovery of demand in oil and gas as uncertainties over the impact of the Covid-19 pandemic remain. Supply remains in excess in the first quarter of 2021. Deleum will remain focus in preserving its sustainability and resilience to weather the continuing challenges and uncertainties for the remaining of the financial year.

Datuk Manharlal a/l Ratilal

Independent Non-Executive Director

Datuk Manharlal a/l Ratilal (Malaysian, aged 65, Male) was appointed to the Board on 1 October 2020. He was appointed as Senior Independent Non-Executive Director on 10 March 2022 and redesignated as Independent Non-Executive Director on 1 January 2023.

He holds a Master in Business Administration from Aston University in Birmingham, United Kingdom and a Bachelor of Arts (Honours) in Accountancy from the City of Birmingham Polytechnic (now known as Birmingham City University).

Datuk Manharlal was attached with RHB Investment Bank Berhad for 18 years, concentrating in corporate finance, where he was involved in advisory work in mergers and acquisitions, and the capital markets. He served as the Executive Vice President and Group Chief Financial Officer of PETRONAS, a member of the Board and Executive Leadership Team of PETRONAS, and sat on the boards of several subsidiaries of PETRONAS until his retirement in late 2018.

Other than the Company, he is also an Independent Non-Executive Director of Hong Leong Investment Bank Berhad, Hong Leong Bank Berhad and Genting Berhad

The COVID-19 pandemic coupled with the low oil environment saw Deleum Berhad’s (“Deleum” or the “Group”) half-yearly revenue decreased by 14.6% or RM49.7 million to RM290.0 million against the corresponding period of RM339.7 million. The decline was attributed to lower revenues from its Oilfield Services and Integrated Corrosion Solution segments which was mitigated by the stronger revenue contribution from the Power and Machinery segment.

Year-to-date, the Group recorded a loss before tax of RM8.8 million against a profit before tax of RM15.9 million in the corresponding period on the back of non-recurring one-off impairment charges and write-offs totalling RM15.6 million. Had the Group excluded these expenses, the Group would have recorded an operating profit for the reporting period.

Revenue for the Power and Machinery (P&M) segment increased by 11.1% or RM18.4 million to RM184.3 million and pre-tax profit was up by RM6.7 million or 60.7% as a result of higher contribution from turbines parts, valves and flow regulator services and machinery management systems coupled with lower operating expenses.

For the Oilfield Services (OS) segment, revenue for the half-year ended 30 June 2020 decreased by 28.1% to RM51.4 million (RM71.5 million previously). A loss of RM20.3 million was reported as opposed to the corresponding period’s profit of RM1.4 million. This was due primarily to the non-recurring one-off impairment charge on its slickline operating assets of RM10.6 million. Other contributing factors were provision for doubtful debts on trade receivables of RM1.0 million and write-offs on its inventory and other receivable of RM1.8 million and RM0.5 million respectively, in addition to its weaker operational performance.

Revenue for the Integrated Corrosion Solution (ICS) segment declined to RM53.9 million, representing a decrease of RM48.0 million or 47.1% as compared with RM101.9 million previously as a result of lower service maintenance activity levels performed for both of its Maintenance, Construction and Maintenance services and Sponge-Jet Blasting contracts. The segment reported a loss of RM5.6 million against a profit of RM1.4 million recorded in the previous corresponding period.

The oil and gas industry are facing an unprecedented time due to the Coronavirus (Covid-19) pandemic and low oil environment, which is expected to remain in the second half of 2020. Although there appears to be a gradual economic recovery, with various degree of relaxations in the lockdown and economic sectors re-opening, the industry is still facing a low oil environment due to uncertain demand.

To navigate through this challenging market and operating conditions, Deleum’s focus shall be towards building resilience, sustainability and consolidation of the businesses within the Group. The Group will continue to operate conservatively by focusing on both cost and cash management.