GEORGE TOWN: Pipe-coating specialist Wah Seong Corp Bhd is upbeat on its outlook for the current financial year ended 31 December 2012 following the Government's strategy to intensify exploration activities in Malaysia to increase oil and gas production as set out in the Economic Transformation Programme (ETP), it said in a statement.

Speaking to reporters after the company's 12th Annual General Meeting, group managing director and chief executive officer Chan Cheu Leong said while its wholly owned subsidiary, Wasco Energy Limited and its group of companies continued to seek business opportunities outside Malaysia, it would focus on gaining participation in the domestic oil and gas development.

“This is due to the expected increase in exploration and production activities by Petronas with its local and international partners in numerous projects based on enhanced oil recovery, small fields' development and pipeline replacement.

“As such, this will result in the rise of new projects as Petronas aims to explore new reserves and obtain the most from existing field assets,” he said.

Its order book currently stands at RM1.2bil. This order book comprises RM727mil from the oil and gas segment, RM243mil from the renewable energy segment and RM182 million from the industrial trading and Services segment.

Chan said the company planned to boost its renewable energy business up as there is a significant potential for palm and agro-based industries globally.

The statement added that the company has recently ventured into the plantation sector.

This venture saw the acquisition of up to 51% stake in Atama Resources Inc, which has been granted the concession rights to develop 470,000 ha of oil palm plantation in the Republic of Congo, Africa.

Based on independent planning and feasibility studies, about 180,000 ha have been identified as highly suitable for the cultivation of oil palm which will be carried out in 10 phases over 15-year period with planting scheduled to start during the second quarter of 2013.

Recognising the significant growth potential in the agro-food industries, the group will place greater emphasis to accelerate the expansion of the renewable energy business in Indonesia and Latin America, where the oil palm planting acreage is increasing rapidly.

Meanwhile, the company is also actively pursuing the development of biomass power generation plants and palm oil mills on a turnkey basis in the Asean and Latin American regions in line with the strategy of developing recurring income.

“The renewable energy business together with the plantation venture is expected to provide a significant contribution to the group in the future,” he added.

The company had recently announced its first quarter ended 31 March 2012 financial results.

For the period, Wah Seong posted a lower net profit of RM17.8mil, compared to RM43.4mil a year ago due to lower margin projects executed in the current quarter.

Its revenue was slightly lower by 1.9% to RM481.6mil from RM490.9mil. Earnings per share were 2.3 sen compared with 5.63 sen.

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