KUALA LUMPUR: Ocean Vantage Holdings Bhd (OVH) posted a net loss of RM6.79 million for the third quarter (Q3) ended Sept 30, 2024 (FY24) from a net profit of RM5.49 million in Q3 FY23.
This reversal is largely attributable to cost escalations and project-specific challenges linked to the nearing completion of the Bintulu Additional Gas Sales Facility 2 (BAGSF 2) project.
The group’s revenue for Q3 FY24 also fell 50.06% to RM19.66 million, down from RM39.38 million in Q3 FY23.
Rising material and manpower expenses drove escalating costs in the BAGSF 2 project.
These factors impacted the group’s ability to maintain profitability and manage cost overruns effectively.
As a result, the group’s gross profit margin for 9M FY24 fell to 2.90%, down from 18.14% in the same period last year.
Meanwhile, revenue for 9M FY24 decreased 35.80% year-on-year (YoY) to RM87.05 million compared to RM135.60 million previously.
Historically a key revenue driver, the EPC and project management segment, reported a 69.27% YoY decline in revenue due to delays and reduced project scope in key contracts.
Liquidity and cash flow challenges also weighed on the group’s performance.
Net cash used in operating activities for the nine-month period stood at RM0.33 million, in stark contrast to the RM8.93 million generated during the same period last year.
Total liabilities remained high at RM48.33 million, further straining the group’s financial position.
OVH managing director Kenny Ronald Ngalin said the challenges faced in Q3 FY24 are specific to the complexities of executing the BAGSF 2 project, which posed unique cost and timeline pressures.
“We are undertaking a comprehensive review of our operations to identify and address the root causes of these issues.
“However, we anticipate a continued period of difficulty as we navigate this challenging environment,” he said in a statement.
The group remains cautious about its outlook for the remainder of 2024.
“Although we face significant challenges in maintaining operational efficiency and stabilising revenue streams, we believe that our proactive approach will position us for recovery and growth in the long term,” Kenny said.
