PETALING JAYA: UMW Oil and Gas Corp Bhd (UMW O&G) swung back to the black in the third quarter ended September 30, with a net profit of RM3.37 million against the net loss of RM135.43 million recorded in the same period last year on the back of higher revenue supported by the stabilising crude oil prices.
Revenue increased more than three fold to RM180.51 million as compared to the RM49.65 million recorded in the previous corresponding quarter, underpinned by stronger demand for drilling services as a result of higher levels of oil and gas activities due to greater certainty and stability in oil prices.
Its board of directors told the stock exchange that the group is presently on a stronger financial footing with the completion of the recapitalisation and refinancing exercises in October and November 2017,
"Total borrowings of the group has reduced significantly and the loan repayment profile is now more in line with the remaining useful
life of the Group assets, resulting in an improved cash flows for the group. Higher utilisation of the group assets and continuous cost optimization initiatives are also expected to contribute positively to the financial performance of the Group for the final quarter of 2017."
However, UMW O&G noted that one-time write off of unamortised transaction costs related to the comprehensive recapitalisation and group debt restructuring exercises as well as potential asset impairment loss arising from year-end review, are expected to impact the 2017 financial performance.
The group was still in the red for the cumulative period of nine months, although its net loss narrowed to RM151.74 million from RM267.76 million last year. Revenue for the period under review improved by 47.6% to RM394.7 million compared with the RM267.34 million recorded last year.
UMW O&G's shares gained 1.7% to close at 30 sen with some 8.24 million shares done.