This was up 31.1% from the RM2.7 million reported in the same quarter last year.
MHB’s revenue rose to RM496.23 million, up 18.7% from the RM417.78 million recorded in the previous corresponding quarter.
The heavy engineering segment saw its revenue rise to RM404.2 million from RM358.4 million previously. The 12.7% increase has been attributed to ongoing projects.
However, it turned in an operating loss of RM8.7 million due to unabsorbed overheads.
In a filing with Bursa Malaysia today, MHB attributed the increase in operating profit in the heavy engineering segment to the partial recovery of Covid-19 claims.
In the marine segment, the revenue rose to RM92.1 million, up 55% from RM59.4 million in the previous corresponding quarter thanks to higher dry-docking and repair activities.
MHB also attributed the improvement in operating profit, from RM3.7 million to RM12.9 million to improved profit margins.
At the group level, the operating profit saw a decline – from RM9.8 million in Q4 2022 to RM7 million in Q1 2023 as a result of lower margins coupled with the recovery of doubtful debts recognised in the preceding quarter.
MHB has recently been cited as a possible white knight for Sapura Energy Bhd (Sapura).
According to a report in business weekly The Edge, majority shareholders of Sapura and MHB are mulling a merger of the two. However, discussions are still at an early stage, the report said.
Permodalan Nasional Bhd owns 40% of Sapura, making it its largest shareholder. MISC Bhd, in which Petronas has a 51% share, holds a 65.5% stake in MHB.
Part of the proposed restructuring plan includes MHB emerging as a white knight for Sapura, a Practice Note 17 (PN17) company.
Like MHB, Sapura operates in the O&G sector. It runs Southeast Asia’s largest O&G fabrication yard whose services include engineering, construction and conversion works.
MHB’s year ahead
MHB is expected to benefit from the reopening of China’s economy and the recent decision by the Organization of Petroleum Exporting Countries (OPEC+) to cut production.
In a filing to Bursa, MHB said the two events are likely to support strong oil prices this year.
“This is likely to drive oil majors to ramp up capital expenditure (while) the rapid growth of renewable energy and decarbonisation efforts could present the group with new business opportunities,” the filing said.
Nonetheless, the group remains “cautiously optimistic” on the outlook for the heavy engineering segment in view of the growing risk of a global recession and geopolitical tension which could negatively affect business prospects.
MHB expects its marine business to remain challenging given the stiff competition from Chinese shipyards amidst the reopening of its borders.
“Furthermore, dry-docking opportunities are becoming limited as older LNG carriers are decommissioned from service due to the inability to comply with energy efficiency and carbon intensity requirements,” it said.
MHB shares lost a sen to 54 sen, giving it a market capitalisation of RM855.69 million.