KUALA LUMPUR: Oil and gas service provider T7 Global Bhd (T7 Global) is expecting bigger capital expenditure (capex) by Petroliam Nasional Bhd (Petronas) on improved oil prices in 2019 despite challenges in the oil and gas industry.
T7 Global chairman Datuk Seri Dr Nik Norzrul Thani Nik Hassan Thani said the group’s diversification into the aerospace business will continue to bode well with the second half of the 11th Malaysia Plan 2016- 2020.
“I am delighted to announce a set of commendable results for the third quarter, as the Group records significant growth in revenue, mainly due to various ongoing projects.
"Despite the challenges seen in the oil and gas industry, we also see improvement in oil prices and also Petronas’ performance which was just announced recently which we foresee a growth in capital expenditure by Petronas for upcoming year," Nik Norzrul said.
He added that T7 Global will continue to focus on projects in the O&G sector and look into new ventures to grow the business.
The recent announcement made in Budget 2019 that aerospace industry has been identified as one of the sub-sectors in focus in the second half of 11th Malaysia Plan 2016-2020 bodes well with the T7 Global’s diversification into the aerospace business, Nik Norzrul said further.
Yesterday, T7 Global posted a net profit of RM2.12 million on the back of a 39 per cent growth in revenue of RM52.74 million in the third quarter (3Q) ended September 30, 2018.
The Group will look into leveraging on this new business opportunity by expanding the company’s metal treatment manufacturing business which will commence operations by mid-2019.
“We will build, operate and set up a metal treatment plant in Malaysia to pursue high value manufacturing businesses in metal treatment. Our new metal treatment plant, scheduled to start operations by mid-2019, is expected to contribute to the Group’s revenue,” he added.
The RM52.74 million revenue was 38.6 per cent higher during the quarter in review, from RM38.07 million in Q3 financial year (FY) ended 2017.
For the nine months ended September 30, 2018 , the Group witnessed a 62.7 per cent surge in revenue of RM165.57 million compared with RM101.76 million in the corresponding period a year ago.
Significant hike in revenue was due to several long term contracts from its engineering packages unit and marine sector with net profit rising 59.78 per cent to RM6.04 million from RM3.78 million.
Its Product & Services and Engineered Packages business divisions reported steady revenue growth, with the Engineered Packages unit registering a revenue surge of 347.71 per cent to RM79.20 million from the nine months ended September 30, 2017 RM17.69 million.
This was mainly driven by engineering packages and offshore equipment packages.
The Products & Services division’s revenue expanded marginally by 2.74 per cent to approximately RM86.37 million from RM84.07 million during the same period a year ago.