Oiltek International (HQU) H1 2023 earnings summary

Executive summary

• H1 2023 revenue declined 5.7% YoY to RM76.73m, while profit after tax rose 44.5% to RM6.85m.

• Order book reached RM368.5m, including RM219.9m of new orders secured in 2023; cash and bank balances were RM86.93m with zero debt.

Financial highlights

• Revenue fell 5.7% to RM76.73m; cost of sales declined 5.7% to RM63.08m and gross profit fell 5.8% to RM13.65m.

• Gross margin held at 17.8%; gross profit included costs for fire-incident rectification works, substantially incurred in H1 2023.

• Profit before tax rose 30.3% to RM9.47m and profit after tax increased 44.5% to RM6.85m.

• Other gains, mainly unrealized FX gains on net US-dollar exposure, rose to RM3.25m from RM1.71m; administrative and other expenses fell 11.2% to RM7.83m, partly reflecting no listing expenses.

Outlook and guidance

• The RM368.5m order book, including RM219.9m of 2023 new orders, is expected to be fulfilled over 18–24 months.

• Outlook was expected to remain positive, driven by growth in served industries, subject to unforeseen circumstances and global economic and geopolitical uncertainty.

• Priorities included securing new and larger projects, expanding into emerging markets, and developing renewable energy processes and customer solutions.