BHIC Turnaround Continues With RM11.8 Million Profit After Tax In Q3 FY2021

The transformation of Boustead Heavy Industries Corporation Bhd (BHIC) to steer the Group back towards the path of profitability, continues to yield positive results as shown in its Profit After Tax (PAT)of RM23.2 million in the cumulative period in 2021 for the quarter ended30September 2021 (Q3 FY2021) compared to RM23.9 million PAT in the cumulative period in 2020. 

Profit Before Tax (PBT) was RM29.6 million in the cumulative period for Q3FY2021compared with RM27.2 million in the cumulative period in 2020. 

BHIC recorded a PAT of RM11.8 million in Q3 FY2021 on the back of revenue of RM43.3 million (RM47.2 million in Q2 FY2021), mainly generated by theRoyal Malaysian Navy (RMN) submarine contracts and other defense-related maintenance, repair, and overhaul (MRO) projects. 

BHIC CEO, Sharifuddin Md. Zaini Al-Manaf said the encouraging performance is the result of ongoing restructuring efforts to turn around the company. These include undertaking specific rightsizing initiatives to reduce headcount, review of operational structures leading to the merging of certain business units, and closure of non-profitable ones, in addition to addressing inefficiency and boosting synergy and productivity across the Group.

“The delivery of the third unit of Littoral Mission Ship (LMS), BADIK to RMNon14September and its commissioning on 22 October 2021, and the expected delivery of the fourth and final unit of LMS jointly built by our associate Boustead Naval Shipyard Sdn Bhd in China, underscores our ability to deliver quality products and meet the high standards of our clients”, he pointed out. 

Commenting on the prospects of the Group, Sharifuddin expects the recent contract extensions awarded to its JV companies to contribute positively to the Group’s earnings for FY2021. These include the contract extensions awarded to BHIC Aeroservices Sdn Bhd (BHICAS), a JV company with Airbus, for the Integrated Maintenance and Logistics Support Services for three units of Malaysian Maritime Enforcement Agency (MMEA) Dauphin AS365N3 helicopters and to Boustead DCNS Naval Corporation Sdn Bhd, a JV company with France’s Naval Group, for In-Service Support for RMN’s fleet of Scorpene submarines. 

Sharifuddin said that in the aerospace sector, BHIC continues to explore with Airbus Defence and Space opportunities to undertake MRO works on military fixed-wing aircraft, and on helicopters in the commercial segment. 

“We are encouraged by the allocation of RM16.0 billion for the defense sector in budget 2022, of which RM1.6 billion is for the upgrade of the main assets of the Malaysian Armed Forces as it augurs well for the prospects of defense industry players like us”, he said. 

Meanwhile, Boustead Holdings Berhad Group Managing Director Dato’ Sri Mohammed Shazalli Ramly said BHIC is set to enhance operational efficiencies, increase its productivity and ensure that it delivers all projects on time, if not ahead of schedule. 

“The use of digitalisation and digital technologies, especially in Project Management are the key factors to improve efficiency and productivity in BHIC. We are steadily seeing positive results and this is consistent with our reinventing strategy to turn around not only BHIC, but Boustead Group of companies into high-performance organisation,” said Shazalli.

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