Thursday, 27 February 2014

UMW Oil & Gas net profit hits RM51mil

UMW Oil & Gas Bhd (UMW OG), which was listed on Bursa Malaysia on Nov 1 last year, turned in a net profit of RM50.85mil for the fourth quarter ended Dec 31, 2013, mainly boosted by its drilling services segment.

UMW OG in its financial notes said the company’s drilling rig UMW Naga 2 continued to operate overseas with a more favourable time charter rate.

It added the utilisation rate of UMW Naga 3 returned to normalcy since early October 2013 after the downtime in the previous month that was caused by damage to a few of its ballast tanks while preparing for an in-field move.

It said the segment was also driven by another full-quarter revenue contribution from the UMW Naga 4 which had commenced a three-year contract with Petronas Carigali in April 2013.

The company’s topline in the fourth quarter was RM206.1mil with basic earnings per share stood at 3.08 sen. No dividends were declared.

UMW OG has no year-on-year comparison for its financial performance but said that revenue surpassed the quarterly average of RM184.2mil by 11.9% while profits before tax at RM54.5mil was an increase of 6.2% from the quarterly average of RM51.3mil.

Commenting on its performance, UMW OG noted its revenue increase was also partly offset by the lower utilisation rates of its Hydraulic Workover Units, UMW GAIT I, UMW GAIT II and the UMW GAIT III.

It said its UMW GAIT III was expected to be mobilised by the first quarter of this year.

UMW GAIT II has been scheduled to mobilise to Vietnam in May 2014 while UMW GAIT I was still sourcing for opportunities, UMW OG said.

Its oilfield services segment, which contributed revenue of RM10.4mil to the fourth quarter, meanwhile fell short by 4.6% of the quarterly average of RM10.9mil.

“Higher revenue from the Thailand (operations) was insufficient to make good the revenue declines caused by machine downtimes in our Labuan operations,” the company said.

On a quarter-on-quarter basis, it said revenue in the fourth quarter saw a marginal improvement over the RM205.3mil in the third quarter due to contributions from the UMW Naga 3 after its utilisation rate returned to normal since October 2013.

While profit before tax of RM54.5mil in the fourth quarter was almost flat compared with the previous quarter, profit contributions from UMW Naga 3 and the additional interest income from the initial public offering proceeds was sufficient to make good the profit shortfalls from UMW GAIT I & III as well as IPO expenses of RM7.3mil charged to the income statement, the company said.