PETALING JAYA: Coastal Contracts Bhd’s net profit for the third quarter ended March 31, 2023 (Q3 FY2023) surged 246.7% to RM153.66 million from RM44.32 million in the same quarter a year ago due to higher profit contribution from its joint venture in Mexico.
The oil and gas (O&G) services provider’s revenue increased to RM55.74 million in the quarter from RM53.84 million previously.
In a filing with Bursa Malaysia today, Coastal Contracts said the higher profit from its gas processing division in Q3 FY2023 was due to the higher profit contributed by the Papan Plant joint venture in Mexico.
“The better showing this quarter was mainly due to higher interest income earned from loans granted to a joint venture (JV) and greater profit share from JVs,” it said.
On prospects, the company said the demand trend for natural gas is expected to increase mainly due to the development of industries and growth in electricity demand using natural gas as the power generation source.
“Recently, Coastal Group diversified its earnings portfolio in Mexico by venturing into gas-sweetening processing plant projects.
“With the jack-up gas compression service unit charter contract secured, which is currently in operation, the group is able to effectively leverage its competitive advantage and a strong foothold in this sector with promising prospects,” it said.
The strong Q3 FY2023 performance lifted nine-month net earnings to RM433.66 million from RM78.07 million, but it reported lower revenue of RM170.03 million compared with RM180.85 million previously.
The group expects the demand for natural gas to rise, driven by the development of industries and growth in electricity demand using natural gas as a power generation source.
Coastal Contracts added it is pursuing new business such as floating production storage and offloading (FPSO), floating production unit (FPU), floating storage and offloading (FSO), floating storage and regasification unit (FSRU), and other O&G-related projects.
At market close, the counter was up six sen or 2.6% to RM2.35 for a market capitalisation of RM1.28 billion.