Wednesday, September 21, 2011

Kencana 4Q earnings up 53% to RM63.7m

KUALA LUMPUR: KENCANA PETROLEUM BHD []'s earnings rose 53% to RM63.72 million in the fourth quarter ended July 31 from RM41.47 million a year ago due to higher progress achieved for contracts.

It said on Wednesday, Sept 21, the group's expansion in offshore services was expected to expand the earnings base and profit margin of the group.

'The group is also looking towards expanding its fabrication business in the region,' it said in its prospects.

Kenanca said 4Q revenue increased at a stronger pace of 77.5% to RM493.72 million from RM278.18 million while earnings per share were 3.41 sen compared with 2.5 sen.

'This is mainly due to higher progress achieved for contracts in hand on the back of bigger order book and better management of relevant costs, contribution from drilling services as well as maiden contribution from offshore diving support services,' it said.

For the financial year ended July 31, its net profit rose 63.8% to RM223.11 million from RM136.16 million. Its revenue increased by 43.2% to RM1.56 billion from RM1.09 billion.

On the outlook, it said Petroliam Nasional Bhd's recent major oil and gas discoveries offshore Sarawak would support the government's strategy to intensify exploration activities in Malaysia.

In the near term, more exploration wells are expected to be drilled offshore Malaysia by Petronas and its production sharing contractors (PSC).

'These activities, especially if they result in discoveries, are expected to spur business opportunities in the oil and gas industry and will promote upstream investment in the country,' it said.

Kencana said capital spending in the upstream oil and gas sector was expected to remain relatively strong. This also included enhancing recovery from existing fields and development of small and marginal fields.


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