PETALING JAYA: Muhibbah Engineering (M) Bhd (MEB) recorded a net loss of RM1.28 million for the third quarter ended Sept 30, 2022 (Q3’22), against a net profit of RM1.28 million in the same period last year mainly due to lower revenue contribution from construction as most of the major projects are at the completion stage while new projects are at the early stage.
“The production of cranes was affected by the quarantine of some of the operational staff and workers due to Covid-19 cases during the first half of 2022 and higher components and shipping costs due to the Ukraine war,” it said in a filing with Bursa Malaysia.
Nonetheless, revenue for the quarter increased 30.4% year-on-year to RM253.05 million from RM194 million.
Net profit for the cumulative period dropped 15-fold year-on-year to RM531,000 from RM7.77 million as revenue decreased 11% to RM624.67 million from RM701.51 million.
The group said despite the subsiding threat from the Covid-19 pandemic to the overall global economy in 2022, there is a surge in crude oil prices and supply chain disruption due to the Russia-Ukraine war.
Therefore, it will endeavour to pursue order book replenishment while continuing efforts in improving cost efficiency and taking measures and actions in tandem with global development.
As of Nov 14, 2022, its total outstanding secured order book in hand for the construction and cranes division is RM1.1 billion.
With regard to the claim of €33 million (RM156 million) submitted by the Syrian Civil Aviation Authority (SCAA) against MEB, the Council of State of Syria has awarded SCAA €3.17 million.
MEB has filed an application to nullify the award based on the grounds that the court-appointed arbitration tribunal has no jurisdiction as the contract between the parties provided for arbitration at the Dubai International Arbitration Centre (DIAC). There are also issues over the impartiality of the arbitrator nominated by SCAA and denial of MEB’s right to defend its claim.
Meanwhile, MEB’s claim against SCAA at DIAC for approximately €36 million remains ongoing.
The other legal cases with TTCL Malaysia Sdn Bhd and additional tax assessment from the Inland Revenue Board of Malaysia also remain ongoing.