Oiltek International (HQU) H1 2024 earnings summary

Executive summary

• 1H2024 revenue rose 30.9% YoY to RM100.45m and profit after tax increased 50.0% to RM10.28m, mainly driven by refinery projects.

• Gross margin expanded to 19.4% from 17.8%; EPS rose to 7.19 sen from 4.79 sen.

• Order book increased 9.9% YoY to RM405.1m, including RM132.8m of new orders secured in 2024 to date.

Financial highlights

• Revenue was RM100.45m, up 30.9%; cost of sales rose 28.3% to RM80.94m and gross profit increased 42.9% to RM19.51m.

• Profit before tax increased 48.6% to RM14.08m; profit after tax rose 50.0% to RM10.28m.

• Other income rose to RM1.75m from RM0.42m, mainly on higher deposit interest and disposal gains; net other gains fell to RM1.65m from RM3.25m on lower unrealised FX gains.

• Administrative and other expenses rose 15.4% to RM9.04m; a RM0.19m trade-receivable impairment reversal reflected collection of previously provided balances.

• Total assets were RM163.0m and liabilities RM92.7m at 30 June 2024; net assets increased 3.7% to RM70.3m.

Outlook and guidance

• Order book was RM405.1m, including RM132.8m in new orders secured in the current financial year; fulfillment is expected over 18–24 months, subject to unforeseen circumstances.

• Overall outlook is expected to remain positive, with performance tied to growth in served industries and exposed to global economic volatility and geopolitical tensions.

• Plans include pursuing larger projects and expanding into existing and new oil-refining markets, while developing renewable-energy processes and sustainability solutions.

• Growth strategy includes pursuing opportunities through investments, mergers and acquisitions, joint ventures and strategic alliances.