Malasyan Sime Engineering Services Bhd (SES) will be investing RM100mil to expand its shipyard capacity by 10% to 15%, managing director Mohamad Shukri Baharom said. Considering that the company’s current shipyard was capable of handling projects worth about RM2bil, a 10% to 15% increase would bring in more business, he said after the company AGM yesterday.The shipyard expansion is part of the company’s move to focus on the design and fabrication of offshore structures for the oil and gas industry. Of the company’s current order book of RM2.4bil, oil and gas-related projects make up about RM2.2bil. Shukri said while SES was involved in other business sectors, such as systems integration, trading and services as well as civil engineering, the growth area for the company currently was in oil and gas. With the current growth in the sector, he expected the company to deliver “a very positive result” in the next financial year “barring any unforeseen incidents.” However, the shipyard expansion will only be completed next July and should begin contributing to SES’ earnings in financial year 2008.
The company was also paring down its participation in the civil engineering sector, as the area had comparatively lower margins than its oil and gas business, Shukri said. He said at present most of the company’s oil and gas projects were for international clients operating in the Middle East. It had been reported that the company was bidding for another RM3bil to RM4bil worth of oil and gas projects, mainly for international clients. SES has returned to the black with a net profit of RM20.5mil on revenue of RM1.24bil for the financial year ended June 30, 2006 compared with a net loss of RM47mil on revenue of RM1.18bil previously. Main board-listed SES is a 70%-owned subsidiary of Sime Darby Bhd.