Scomi Marine Bhd
News Release 25 February 2010
SCOMI MARINE’S OPERATIONAL PROFIT UP 44.3% FOR Q4 2009
BUT IMPACTED BY GOODWILL IMPAIRMENT
Scomi Marine Bhd (“Scomi Marine” or “the Company”), which is listed on the Main Board of Bursa Malaysia, today announced a higher profit from operations of RM21.4 million for the 4th quarter ended 31st December 2009, 44.3% higher than the RM14.9 million achieved for the corresponding quarter. For the full financial year ended 31st December 2009, the company recorded a profit from operations of RM80.9 million, 27.1% higher compared to the financial year 2008.
Revenue for the quarter was RM110.9 million, a 4.7% reduction from the corresponding quarter and for the full financial year revenue was RM448.3 million, a 4% reduction from the preceding financial year. The reduction in revenue was mainly due to the lower coal tonnage carried for our Indonesian customers as the first half was affected by slowing demand, which picked up in the second half.
Despite the lower revenue, Gross Profit margin improved to 28% in FY2009 from 19.6% recorded in the preceding year. The improvement was attributable to better overall cost management. Of the major items, bunker expenses were lower due to reduction of both consumption and price of the commodity. Docking expense was also lower as we benefit from our strategy of docking vessels locally in Indonesia.
Despite the encouraging results, the company had to recognize an impairment loss on goodwill and provision for insurance claims during the quarter which reduced the company’s net profit to a net loss of RM71.7 million for the full financial year ended 31st December 2009 and net loss of RM131.1 million for the current quarter compared to the preceding year and corresponding quarter net profits of RM65 million and RM19.6 million respectively.
“Taking a long term view at the sectors where we operate, the fundamentals for both the coal and offshore Oil and Gas sectors remain intact, which is cause for optimism for the company,” said Mukhnizam Mahmud, President of Scomi Marine. “The global demand for coal is expected to remain strong with Indonesia continuing to be a major coal producer and exporter. Both Indonesia and India will see increases in
electricity generation through coal power plants that are being planned and constructed over the next 3-5 years. This presents an opportunity for the Company in its effort to expand its market in coal logistics. The division will continue to consolidate its present position as a valued transportation provider for our partners in Indonesia and look at opportunities to grow with them,” added Mukhnizam Mahmud. “Exploration and Production activities for the Oil and Gas sector around the region continues which will push demand of vessels but the deliveries of new vessels over the next 2 years could also put pressure on rates. Nevertheless, we expect charter rates to remain stable in this region for 2010. With this backdrop, the offshore division is planning to invest in new vessels, where current vessel prices would give acceptable return on investments for the Company. Fleet utilization and operational efficiency will continue to be pursued as part of the strategic thrust to enhance the earnings of the division. Most of our vessels are on long term charters and are chartered to Q3 2010 and beyond. Therefore utilization rate for the year is expected to improve from
FY2009,” concluded by Mukhnizam Mahmud.