KUALA LUMPUR:Integrated oil and gas (O&G) solutions provider, Barakah Offshore Petroleum Bhd has narrowed its net loss in the second quarter ended June 30, 2018 (Q2 2018), to RM15.49 million compared with RM82.12 million in the same quarter last year.
Revenue improved to RM59.16 million, up 12.4 per cent versus RM52.63 million previously.
It attributed the growth to higher revenue contribution from ongoing projects in the Installation and Construction Services (ICS) of RM28.1 million from RM20.9 million in Q2 2017, while the Pipeline and Commissioning Services (PCS) reported a revenue of RM31 million in quarter under review.
“We have seen an improvement in our financial performance as we endeavour to strengthen our cash flow and competitiveness,” its Chief Executive Officer Nik Hamdan Daud said in a statement today.
For the first half of 2018, net loss was down to RM35.42 million compared with RM86.73 million previously, while revenue was lower at RM78.54 million versus RM129.47 million for the first six months of 2017.
He said earnings continued to be impacted by operating losses and high fixed overheads, with its pipe lay barge, Kota Laksamana 101 (KL101) as the main cost component. KL101 has remained idle due to lack of significant offshore installation projects in the sector.
“Nonetheless, our near-term focus remains on rationalising our operating costs as well as securing more contracts to replenish our order book,” he said.
Barakah projected activities in the sector to pick up in line with improving oil prices, he added.
“We are actively bidding for more projects with an estimated value of RM1.5 billion, mainly for Transportation and Installation Services (T&I), as more oilfield operators step up their field development programme. As we bid for more T&I jobs, opportunities for KL101 utilisation is expected to improve moving forward,” said Nik Hamdan.
He also said Barakah’s recent wins of two contracts for Maintenance, Construction and Modification (MCM) works are expected to contribute positively to the Group’s earnings, replenishing the estimated order book to RM1.4 billion as at July 31, 2018.
However, the total value of the contract will depend on the work orders issued throughout the duration of the contract. “We expect to secure more MCM contracts going forward on a back of a more committed work programme budget allocated by oil field operators to maintain and improve their facilities.”
To recap, Barakah was awarded a five-year contract from two O&G players, Enquest Petroleum Production Malaysia Ltd. and Sapura Exploration and Production (PM) Inc, for the provision of MCM services for structures and facilities of O&G fields offshore Peninsular Malaysia under Package A from July 2018 to July 2023.
On the Group’s prospects, Nik Hamdan said, “We foresee Barakah’s performance to recover in financial year 2019 with the improving outlook of the O&G industry. We will continue to execute our strategies to improve the Group’s cost structure as well as project efficiencies, while actively participating in tenders to ensure sustainability.”