Offshore and marine firm Kim Heng reports first profit since 2016

Listed offshore and marine player Kim Heng posted its first set of positive results since 2016, thanks to an improving operating environment, gains from sale of assets and higher government grants.

The company reported on Monday a net profit of $5.07 million for the six months to June, reversing a net loss of $3.65 million for the same period a year ago.

This came on the back of first-half revenue growth of 5 per cent to $30.48 million from $28.94 million for the year-ago period.

The results translated into earnings per share of 0.7 cent from a loss per share of 0.5 cent. As at June 30, the company's net tangible asset per share stood at 8.5 cents.

Among its four key business units, revenue from its renewable energy segment dived 97 per cent to $282,000 from $8.06 million a year ago.

The company, which has more than two dozen offshore service vessels, said this was because the new offshore wind-farm projects it had secured in Taiwan would commence only during the second half of this year.

Kim Heng has been active in providing offshore vessels and engineering services to wind-farm projects off the coast of Taiwan over the past year.

More recently, its wholly owned subsidiary Adira Renewables signed a memorandum of understanding with Crowley Wind Services to cooperate on offshore wind-farm cable-laying installation projects across the United States' east coast.

Its executive chairman Thomas Tan said the company had secured a significant number of contracts to service the offshore wind-farm markets and expressed confidence that the projects would start getting off the ground some time during the second half of this year.

"We continue to see recovery in all segments of the oil and gas sector, with demand for vessel chartering and renewable wind-farm projects growing strongly," he said. "We expect the group to perform positively amid the gradual reopening of borders worldwide, the tight supply situation in oil and gas, and increasing focus on renewable energy in the region in the foreseeable next 12 months."

Revenue for Kim Heng's chartering of vessels segment remained constant at about $12 million, while its marine construction revenue increased by $2.5 million, or 147 per cent, to $4.2 million as crane and equipment utilisation rates surged.

Its oilfield services revenue rose by $7.3 million, or 109 per cent, to $14.1 million due to higher material sales and more projects being completed following the easing of Covid-19 safe management measures.

Ven Sreenivasan

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A version of this article appeared in the print edition of The Straits Times on August 10, 2022, with the headline Offshore and marine firm Kim Heng reports first profit since 2016. Subscribe