Saturday, November 27, 2010

Scomi Group in the red with RM166m net losses

KUALA LUMPUR: SCOMI GROUP BHD [] reported net losses of RM166.48 million in the third quarter ended Sept 30, in contrast to the net profit of RM22.97 million a year ago.

The company said on Friday, Nov 26 the losses were due to lower revenue from its core business while there was a potential impairment and costs amounting to RM52.6 million and provision of RM109.7 million.

Turnover was RM367.6 million compared with RM448.5 million a year ago, with the major contributors from the oilfield services division and the transport solutions division. Loss per share was 11.99 sen compared with earnings per share of 2.27 sen.

'The oilfield services division generated revenue of RM269.5 million for the current quarter, representing a decrease of RM31.4 million or 10% over RM300.9 million recorded in the corresponding quarter in 2009,' it said.

Scomi said the decrease was mainly due to lower sales in UK, Middle East and India, whilst Russia and Asia countries performed fairly well. It added the weakening of US dollar against most currencies has also substantially impacted the revenue reported for the period.

Revenue from the transport solutions division was RM77.2 million, down RM45.1 million or 37% from RM122.3 million a year ago. The decline in revenue was due to the disposal of machine shop in the preceding quarter.

Scomi said the energy logistics division was impacted by the cabotage law in the regional markets which delayed the deployment of new vessels into these markets.

The company explained this caused it to reduce its equity interest in its coal logistics and offshore businesses in Indonesia.

'This transaction resulted in the need to remeasure the disposal group to its fair value in the current quarter with a provision being made amounting to RM109.7 million. However, the division will receive approximately RM550 million in cash upon completion of the transaction,' it said.

After the provision and other provisions for potential impairment and costs totaling RM52.6 million, net loss for the current quarter was RM166.5 million compared to net profit of RM23.0 million a year ago.

'Excluding these adjustments, net loss for the quarter would have been RM4.2 million,' it said.



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