Deleum stays cautiously optimistic on FY25 prospects

PETALING JAYA: Deleum Bhd remains “cautiously optimistic” on its prospects for the remainder of its financial year ending Dec 31, 2025 (FY25), supported by a RM1.5bil order book and the recent acquisition of PT OSA Industries Indonesia (OSAII), which has already begun contributing to revenue.

In a filing with Bursa Malaysia, the group noted that demand in Malaysia’s oil and gas (O&G) sector remains resilient, particularly in operations and maintenance activities, despite ongoing price volatility driven by trade-related uncertainties.

“Oil production volume continues unabated in the region, creating a positive operating landscape for service providers like Deleum,” it said.

The group added that its US$7mil purchase of a 70% stake in OSAII, completed in June, marks a promising start to its regional expansion strategy.

“The group’s order book of about RM1.5bil, together with our newly established regional platform via OSAII, positions Deleum to navigate near-term industry challenges and to drive sustainable performance in the upcoming quarters,” it said.

In a separate statement, chief executive officer Rao Abdullah said the acquisition underscores Deleum’s focus on growth beyond Malaysia.

“This development reflects our commitment to sustainable growth and reinforces our vision of positioning Deleum as a competitive force in the Southeast Asian oil and gas landscape,” he noted.

For the second quarter ended June 30, 2025 (2Q25), Deleum’s revenue rose 4.9% year-on-year to RM236.9mil from RM225.9mil, lifted by stronger contributions from its oilfield integrated services (OIS) segment, though was offset by weaker sales in the power and machinery (P&M) segment.

Net profit for the quarter, however, fell 12.5% to RM19.6mil from RM22.4mil in 2Q24, dragged by lower operating results in the P&M segment.

This was due to a net foreign exchange loss of RM1.1mil (versus a net gain of RM1.5mil in 2Q24), a fair value loss on forward foreign currency exchange contracts of RM700,000 (versus a fair value gain of RM400,000 in 2Q24), and higher operating expenses.

The impact was partly mitigated by improved margins in the OIS segment.

For the first half of FY25 (1H25), revenue climbed 7.5% to RM416.3mil from RM387.3mil a year ago, while net profit edged up 1.2% to RM32mil from RM31.6mil.

The performance was supported by stronger gross profit from both P&M and OIS, though partly offset by forex and fair value losses as well as higher expenses.

As at end-June, Deleum maintained a net cash position with RM181.3mil in cash and bank balances, RM58.8mil in an investment securities fund, and borrowings of RM41.5mil.