Scomi Records 43% Growth in Q2
Scomi Engineering Bhd (formerly known as Bell & Order Berhad, "Scomi Engineering") listed on the 2nd Board of Bursa Malaysia Securities Berhad announced a financial Net Profit of RM7.4 million on the back of a Revenue of RM61.9 million for the 2nd Quarter ended 30th June 2006. This is an increase of 36% and 43% respectively as compared to the previous quarter, 1st Quarter 2006.
Scomi Engineering's overseas business was the main growth contributor for the group. Its overseas business contributed more than 90% to Net Profit for the quarter.
By business units, the highest Revenue contribution was from the machine shop at 81%, followed by logistics engineering at 16% and its non-core fleet management at 3%.
The excellent performance by the machine shop business was attributable to its Singapore machine shop receiving recurrent overseas orders especially from Saudi Aramco in Saudi Arabia.
"We remain confident of our future results with our focus on expansion and growth. All three business units are going through an exciting period at this moment with various opportunities for expansion and growth" said En Hilmy Zaini, Senior Vice President of Scomi Engineering.
Scomi Engineering completed its acquisition of MTrans Transportation Systems Sdn Bhd ("MTrans") on 10th July 2006, making it a subsidiary of Scomi Engineering. Thus Scomi Engineering has not only exponentially increased its manufacturing capacity but it has also enhanced its fabrication technology, advancing into the fabrication of monorail systems and urban transportation solutions.
"We are also expanding our businesses for greater capacity as well as for a wider global footprint. The machine shops are moving ahead into a further 2 locations while the logistics engineering continues to forge ahead with bidding in Korea, Mauritius, Karachi and Medina for monorail projects." said Hilmy.
Scomi Engineering expects to grow from machine shops in 7 locations to 9 locations, expanding into Saudi Arabia and West Irian. With the set up in Saudi Arabia, which can be as early as the fourth quarter this year, Scomi Engineering will be able to reduce the impact of shipping, handling and storage issues out of Singapore, for its orders from its clients in Saudi Arabia and other Middle Eastern countries. Further it will be able to source for local content in Saudi Arabia and hence create an advantage for itself in obtaining additional works in the country. In West Irian, Scomi Engineering is in negotiation to provide the machine shop equipment, technology and service expertise for its client's facility. However, this start up is only anticipated to generate income in mid 2007.
For its logistics engineering, it already has an established presence in Hong Kong and Bangladesh for the export of the MTrans urban buses and is looking at other Asian and Middle Eastern markets for expansion.
Scomi Engineering's focus continues to be on expansion to acquire greater innovation capability and capacity to augment productivity and competitiveness. This strategy is in line with the Ninth Malaysia Plan ("9MP") that challenges the manufacturing sector to upgrade itself towards higher value added activities and capacity in providing services. The 9MP forecasts an average annual growth rate of 6.7% for the manufacturing industry as a whole with a 7.8% average annual growth rate specific for the transport equipment industry.
This is the second quarterly financial results being announced by Scomi Engineering since changing its core businesses into an energy and logistics engineering company. The energy engineering business comprises the machine shops services for the oil and gas industry. The logistics engineering comprises design and manufacture of special purpose vehicles, urban transportation solutions and fleet management services for the commercial, rail, defense and transportation industries.
Scomi Engineering's machine shops are currently located in 6 countries in Malaysia, Singapore, Brunei, Thailand, Australia and Indonesia. Its logistics engineering business has 2 factories with land capacity of 26 acres.
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