BHIC REVENUE JUMPS 32% IN FIRST QUARTER

KUALA LUMPUR, 26 May 2011 – For its first quarter ended 31 March 2011, Boustead Heavy Industries Corporation Berhad (BHIC) recorded revenue of RM117 million, an increase of 32% as compared with RM88 million reported in the corresponding period last year. This increase was mainly attributed to the contribution from defence related projects, which included the in-service support for ships and submarines, as well as preventive and corrective maintenance on equipments and machinery.

Compared with the previous year’s corresponding quarter, profit after tax had decreased by 12% to RM14 million. The bottom-line was impacted by increase in finance charges due to higher borrowings from the acquisition of three chemical tankers for chartering business, coupled with lower contribution from associates with the completion of the patrol vessel project.

Tan Sri Ahmad Ramli Mohd Nor, Managing Director of BHIC said, “Our recently established joint ventures, namely Boustead DCNS Naval Corporation Sdn Bhd, BYO Marine Sdn Bhd and Contraves Advanced Devices Sdn Bhd, contributed positively to the Group’s results. We are optimistic that this trend will follow through in the coming quarters of the financial year. The Group is also working towards ensuring the completion and delivery of other ongoing jobs.”

“Presently, our technicians and engineers are working together with our foreign partners for effective transfer of technology. Positive developments were also reported by BYO Marine, the joint venture company which was awarded the RM130.7 million contract to construct ten Fast Interceptor Crafts. The first interceptor craft is scheduled for delivery to the client in June 2011, upon the completion of a one-month trial session in Port Klang. Contraves, the Melaka based manufacturer of electronic products, continues to serve clients from overseas countries.”

Tan Sri Ramli continued, “The chartering of the acquired chemical tankers is expected to commence in the middle of the year, and this will generate a new source of income for the Group. As for our associate, the contract to build the six new Littoral Combat Ships is in its advanced stage of preparations and negotiations are expected to commence soon.”

“The Group is in its transformation stage, and there are ongoing initiatives at business and support unit level to not only increase returns and reduce cost, but to streamline procedures and processes for more effective monitoring and control,” Tan Sri Ramli concluded.

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