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Quarterly Report For The Financial Period Ended 30 June 2018

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Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements Of Profit Or Loss

Condensed Consolidated Statements of Financial Position

Condensed Consolidated Statements Of Financial Position

Analysis of Performance

Review of performance for the current quarter (Quarter ended 30 June 2018) against the corresponding quarter (Quarter ended 30 June 2017):

  1. Revenue

    Revenue decreased by RM1.7 million or 3% in the current quarter, from RM54.9 million in the corresponding quarter, even though utilization rate has increased to 64.7% in the current quarter from 58.9% in the corresponding quarter due to lower daily charter rate ("DCR").

  2. Gross profit

    The cost of sales decreased by RM3.1 million or 8%, from RM39.9 million for the quarter ended 30 June 2017 to RM36.8 million for the quarter ended 30 June 2018. This is due to the cost saving from vessels laid-up and lower fuel consumption cost initiatives in relation to domestic safe manning during the current quarter.

    Consequently, the Group's gross profit increased by RM1.3 million or 9%, from RM15.0 million in the corresponding quarter to RM16.3 million in the current quarter as a result of better cost management notwithstanding a slight decrease in revenue.

  3. Administrative expenses

    The administrative expenses increased by RM2.6 million or 36%, from RM7.3 million for the quarter ended 30 June 2017 to RM9.9 million for the quarter ended 30 June 2018 primarily due to higher unrealised foreign exchange loss in current quarter.

  4. Taxation

    Taxation

    The effective tax rate for the current quarter and period ended 31 March 2018 is higher than the statutory tax rate of 24%. This is mainly due to higher profit contribution from Malaysia tax resident entity offset with the lower tax rate applicable to income from our vessel leasing subsidiaries being Malaysia tax residents incorporated in Labuan.

  5. Loss after taxation

    As a result of the foregoing, the Group recorded higher loss after taxation of RM3.6 million in current quarter compared to RM3.5 million for the corresponding quarter.

Review of performance for the current period ended 30 June 2018 against the corresponding period ended 30 June 2017:

  1. Revenue

    The Group's revenue increased by RM4.9 million or 5%, from RM96.3 million for the corresponding period to RM101.2 million in the current period. The increase was due to higher revenue from charter hire of forerunner vessel and higher utilization of Straight Supply Vessel ("SSV").

  2. Gross profit

    The cost of sales decreased by RM2.4 million or 3.2% in the current period, from RM76.7 million in the corresponding period to RM74.3 million in the current period. This is due to lower fuel consumption cost.

    The Group's gross profit increased by RM7.3 million in the current period, from RM19.6 million in the corresponding period to RM26.9 million in current period due to higher revenue and lower cost, driven by a higher utilisation of vessels.

  3. Administrative expenses

    The administrative expenses increased by RM2.8 million or 20.1%, from RM13.4 million for the period ended 30 June 2017 to RM16.2 million for the period ended 30 June 2018 primarily due to higher unrealised foreign exchange loss in current period.

  4. Loss after taxation

    As a result of the foregoing, loss after taxation increased by RM1.6 million from RM9.5 million for the period ended 30 June 2017 to loss after taxation of RM11.1 million for the period ended 30 June 2018.

Review of performance for the current quarter (Quarter ended 30 June 2018) against the preceding quarter (Quarter ended 31 March 2018):

The Group's revenue increased by RM5.1 million from RM53.2 million for the quarter ended 31 June 2018 to RM48.1 million for the quarter ended 31 March 2018 , mainly due to higher utilisation during the quarter 30 June 2018 of 64.7% as compared to 51.8% in the quarter ended 31 March 2018.

The Group's loss after tax has decreased by RM4.0 million from a loss after tax of RM7.6 million for the quarter ended 31 March 2018 to loss after tax of RM3.6 million for the quarter ended 30 June 2018, mainly due to higher revenue in quarter ended 30 June 2018.

Prospects for the Financial Year Ending 31 December 2018

The Group continues to focus on securing new contracts and maximising utilisation rates through competitive tendering for domestic and regional contracts, as well as leveraging on its continued presence in Brunei. The upstream exploration and production activities in Malaysia are expected to gradually increase but continue to be volatile and underpin the demand for OSV. The Group continues to work on conserving cash and reducing cost to improve its business liquidity and competitiveness.

In view of this, the Board of Directors remain focused on improvement initiatives, the Group's liquidity and competitiveness.