Sunday 16 Feb 2025
BHIC swings back into the black in 3Q on stronger revenue, reversal of expected credit losses
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KUALA LUMPUR (Nov 19): Boustead Heavy Industries Corp Bhd (BHIC) returned to the black with a net profit of RM4.11 million for its third quarter ended Sept 30, 2020 (3QFY20), compared with the net loss of RM567,000 incurred in the previous quarter of 2QFY20, on stronger revenue and a reversal of expected credit losses during the quarter that amounted to RM6.07 million.

The group's revenue rose 5% quarter-on-quarter to RM37.72 million from RM35.91 million, mainly due to milestones achieved for defence-related MRO projects, it said in a stock exchange filing. 

Contribution from its JV companies, meanwhile, doubled to RM1.2 million from RM612,000, mainly contributed by BHIC Aeroservices Sdn Bhd.

On a year-on-year basis, the group's net profit was up 25.47% from RM3.28 million, while revenue strengthened 3.58% from RM36.41 million.

For the nine months ended Sept 30, 2020 (9MFY20), BHIC's net profit shot up to RM23.93 million from RM1.92 million a year prior, despite lower revenue, due to a total reversal of RM24.7 million in expected credit losses for the period. Revenue slipped 7% to RM117.67 million from RM126.64 million.

In a statement, BHIC chief executive officer Sharifuddin Md Zaini Al-Manaf said the movement control order (MCO) in March, together with the subsequent conditional MCO, had affected the progress of some of the group's jobs at hand such as the Littoral Mission Ships (LMSs) being built in China. Hence, the group's LMS3, which was scheduled to be launched in April, was only launched on Oct 28.

The group now expects to hand over LMS2 to the Royal Malaysian Navy by February 2021.

“However, we expect the extension of the In-Service Support (ISS) contract on Scorpene submarines awarded to our JV company BDNC Naval Corporation Sdn Bhd by Ministry of Defence Malaysia in June 2020, and the extension for the Integrated Maintenance and Logistic Support Services on three units of Malaysia Marine Enforcement Agency (MMEA) Dauphin AS365N3 helicopters by Ministry of Home Affairs in July 2020, to positively contribute to the group’s bottom-line.

"They also add to our track record of being one of the leading defence contractors for MRO in Malaysia”, he added.

Shares in BHIC finished 4.24% or 2.5 sen higher at 61.5 sen today, valuing the group at RM152.80 million.

Edited ByTan Choe Choe
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