Dayang falls into the red in Q4 on lower profit margins

PETALING JAYA: Dayang Enterprise Holdings Bhd swung to the red registering a net loss of RM54.25 million in the fourth quarter ended December 31,2017 against a net profit of RM46.71 million in the same quarter last year, due to lower profit margins arising from lower charter rates and forex losses.
Its forex loses for the quarter under review amounted to RM19.6 million as compared to a forex gain of RM48.9 million reported in the last quarter of the previous year.
Revenue, meanwhile, declined 12.8% to RM173.76 million from RM199.2 million on the back of lower work orders received and performed.
The group expects 2018 to be busy and upbeat based on current work orders received from oil majors and the work planning activities which are currently on hand as well as renewed maintenance construction and modification (MCM), PAN hook-up and commissioning (HUC) contracts, engineering, procurement, construction and commissioning (EPCC) activities.
"Going into 2018, the group will continue to draw down its revenue from its balance contract order book of RM2.8 billion that stood as at December 31, 2017. The Group will continue to operate within the core competencies of the new MCM contract and also the remaining HUC and EPCC contracts and offshore support vessels charter."
Dayang also highlighted that it is currently awaiting the results of some tenders for contracts with oil majors that are still under evaluation.
"Any successful win in this should see a further replenishment of the order book lasting for one to five years. Though it is not possible to predict the outcome of these tenders, the Group has always demonstrated its operational and technical supremacy in winning these brownfield contracts," it said.
The group added that it will remain cautious and vigilant in its pursuit for more contract replenishment and in the management and sustenance of cash flow while also continuing to exercise due care and prudence in the running and administration of the company's business amid a very challenging industry.
For the whole of 2017, Dayang recorded a net loss of RM143.93 million as opposed to a net profit of RM54.54 million, due to an impairment loss on property, plant and equipment and forex losses, while revenue dropped 1.8% to RM695.49 million from RM708.24 million.
The stock gained 12.75% to close at 84 sen, with some 16.37 million shares changing hands.