Deleum Bhd, a provider of a diverse range of supporting specialised products and services to the oil and gas industry, posted improved half-year results, turning around to record a profit of RM7.2 million against a loss of RM9 million in the corresponding period.
The stronger financial performance for the 6-month period ended June 30, 2021 was despite a 20.3 per cent lower revenue of RM231.1 million compared to RM290.0 million of the corresponding period. The lower revenue was on the account of depressed revenue recorded by the Power and Machinery (P&M) and Integrated Corrosion Solution (ICS) segments.
Revenue of the P&M segment decreased by 14.4 per cent to RM157.9 million and profit before tax fell by 10.1 per cent to RM16 million as a result of weaker sales on turbine parts and valves and flow regulator services.
However, the favourable movement in Ringgit against US Dollar chalked up a net gain of RM1.2 million (loss of RM1.8 million in the corresponding period), partially cushioning the effect of the weaker sales.
For the Oilfield Services segment, revenue increased by 4.9% to RM54 million and segment results too improved with a lower loss of RM328,000 (loss of RM20.3 million in the corresponding period).
This was due to the improved revenue recorded following higher slickline asset utilisation. The lower loss during the period under review was in line with the higher revenue, improved operating margins, absence of inventory write-offs as well as lower impairment made on its trade receivables and contract assets.
The corresponding half year segment results were adversely impacted by the non-recurring impairment charge made on its slickline operating assets of RM10.6 million.
Revenue for the ICS segment declined 64.8 per cent to RM19.0 million with lower activity levels in maintenance services for both of its Maintenance, Construction and Modification and local Sponge-Jet Blasting operations.
Higher operating margins coupled with lower overhead expenses cushioned the set back of decline in revenue for the segment to incur a lower loss before tax at RM3.5 million compared to RM5.6 million previously.
