SERBADK 5279 pn17 SERBA DINAMIK HOLDINGS BERHAD net loss widens as 'corporate expenses and consolidation elimination' nearly triples

 SERBADK 5279 pn17 SERBA DINAMIK HOLDINGS BERHAD net loss widens as 'corporate expenses and consolidation elimination' nearly triples

KUALA LUMPUR (May 30): Troubled oil and gas services provider Serba Dinamik Holdings Bhd posted its third consecutive net loss for the third quarter ended March 31, 2022 (3QFY22), with a net loss of RM434.19 million — its largest to date.

Prior to this, Serba Dinamik posted a net loss of RM290.33 million for 2QFY22 and a net loss of RM42.11 million for 1QFY22. The group had changed its financial year end to June 30 from Dec 31 last year.

Consequently, 3QFY22 losses per share widened to 11.7 sen, its bourse filing showed on Monday (May 30), compared with 7.88 sen for 2QFY22 and 1.14 sen for 1QFY22.

The wider net loss quarter-on-quarter (q-o-q) was despite gross operating loss narrowing to RM77.22 million in 3QFY22, from RM165.85 million in 2QFY22.

Instead, losses under “corporate expenses and consolidation elimination” rose 180.46% q-o-q to RM355.47 million, from RM126.74 million. No explanation was given by Serba Dinamik on the matter.

The weaker performance was despite revenue for the quarter rising 16% q-o-q to RM205.48 million, from RM177.14 million in 2QFY22.

The increase was mainly due to activities in the operations and maintenance (O&M) segment, especially from Qatar, United Arab Emirates (UAE) and Malaysia, it said.

This more than offset the 76.9% decrease in engineering, procurement, construction and commissioning's (EPCC) revenue from RM7 million in 3QFY22 to RM30.4 million in 2QFY22, which it said was due to slower EPCC activities in Malaysia.

On geographical segmentation, Serba Dinamik noted that the Middle East region continued to be the highest revenue contributor for the group at 64%, versus 23.2% in Asean.

It said the Middle East contributed 64% of the overall revenue for the quarter or RM205.5 million, with revenue mainly being contributed by Qatar, followed by the UAE, of RM100.1 million and RM30.6 million respectively.

It said Malaysia serves as the major contributor for the ASEAN region with RM44.5 million or 21.6% of revenue, with revenue mainly contributed by O&M and EPCC activities. Indonesia meanwhile contributed 1.5% of total revenue for the quarter or RM3.1 million.

Subsequently, Serba Dinamik said Central and South Asia regions contributed revenue of RM21.5 million or 10.5% of total revenue for the group, which were mainly derived from the country of Turkmenistan.

Separately, the United Kingdom contributed RM4.8 million in revenue for 3QFY22, mainly from O&M activities.

On prospects, Serba Dinamik said the group’s annual general meeting, which was held on Jan 31, 2022, approved all resolutions, which is a good sign of its shareholders' trust.

The cash-strapped company is currently in court, seeking a restraining order against creditors of its subsidiaries, as it plans to engage with creditors for a proposed scheme of arrangement that it anticipates will provide “100% return” to its creditors.

“Even though the group has now been classified as a Practice Note 17 company, the board is confident that the restructuring and regularisation plan will benefit shareholders in the long run. The board will be filing an application to seek leave from court to convene its creditors meeting upon withdrawal of its application for judicial management.

“Despite completion of the statutory audit, the board of directors anticipates that the group's operations will remain challenging. On the other hand, the board of directors pledges to resolve the ongoing issue, including the restructuring and regularisation plan, in the best interests of stakeholders,” it added.

Serba Dinamik’s share price settled unchanged at 11 sen on Monday, giving it a market capitalisation of RM409.99 million.

http://www.theedgemarkets.com/article/serba-dinamik-net-loss-widens-corporate-expenses-and-consolidation-elimination-nearly