This is despite Q4 revenue rising 17.91% to RM713.13 million from the previous quarter at RM604.77 million, the company said in its latest quarterly report.
However, things look rosier for Hibiscus on a year-on-year basis as Q2 net profit jumped 45% to RM70.47 million from RM48.49 million in Q2 FY2022.
For the six months ended Dec 31, 2022 (H1 FY2023), its net profit surged by 128.56% to RM205.73 million from RM90.01 million in H1 FY2022.
Hibiscus declared a dividend of 0.75 sen per share with the ex-date on March 17, and is payable on April 18, 2023. Earnings per share rose to 3.5 sen from 2.42 sen in Q2 FY2022.
Underperforming assets
Hibiscus noted that certain assets underperformed this quarter, recording a loss after tax that may well be the reason for a fall in quarter-on-quarter profits.
The group’s investment holdings contributed a loss of RM7.5 million in the quarter. These are largely investments in companies owning /operating oil and gas concessions.
Additionally, profit before tax in its commercial arrangement area (CAA) recorded a RM41 million lower profit in comparison to the preceding quarter for similar reasons – a lower volume of crude oil sold at lower average realised prices.
This includes its 35% participating interest in PM3 CAA, a producing conventional oil field located in shallow water between Malaysia and Vietnam.
MD Kenneth Pereira said high oil and gas prices supported the growth in year-on-year profits.
“We have seen considerable growth in Q2 FY2023 which can be attributed to better performance from the Peninsula Hibiscus Group assets and the Anasuria Cluster (in the UK).
“Despite the one-off negative non-cash adjustment from the Energy Profits Levy regime in the UK, we were still able to deliver strong numbers,” said Pereira.
In the latest quarter, the group incurred a one-off non-cash adjustment from the Energy Profits Levy regime amounting to RM104 million, which will be fully reversed in March 2028. The reversal in the current quarter from these one-off charges was RM7.6 million.
SPAC success story
Hibiscus has certainly come a long way since 2011 when it first listed on Bursa Malaysia, and faced its fair share of trials and tribulations.
It was the first special-purpose acquisition company (SPAC) listed on Bursa. SPACs are non-income-generating businesses that raise funds via an IPO to purchase a generating asset.
To continue trading on Bursa, these companies have to complete the qualifying acquisition (QA) within three years of its listing or IPO date or face de-listing.
Ninety per cent of the IPO proceeds raised by a SPAC has to be put into an interest-bearing trust account, and at least 75% shareholders’ approval is required for the QA to go through.
Hibiscus’ QA was a 35% equity interest in Lime Petroleum Plc, whose assets included oil and gas concessions in the Middle East.
At present, the group has producing oil and gas assets under its belt beyond the shores of Malaysia in Vietnam, Australia and the UK.
In a Bursa filing on Feb 3, its associate company 3D Oil Ltd announced that recent drilling explorations in the Bass Strait, off Australia, have resulted in the programme being potentially more extensive than previously announced.
At the close of trade today, Hibiscus’ share price fell 4 sen or 3.51% to RM1.10, giving it a market capitalisation of RM2.21 billion.