Business

Published: Friday August 3, 2012 MYT 12:54:00 PM

MMHE shares slump on disappointing earnings


KUALA LUMPUR: Shares of Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) fell to the lowest since mid-June after its second quarter earnings fell 29.9%, prompting analysts to lower their earnings outlook.

At 12.30pm, MMHE was down 23 sen to RM5.15, the lowest since June 14. There were 465,800 shares done at prices ranging from RM5.13 to RM5.29

The FBM KLCI fell 3.02 points to 1,630.43. Turnover was 492.17 million shares valued at RM546.97mil. There were 238 gainers, 365 losers and 315 counters unchanged.

On Thursday, MMHE reported its Q2, 2012 earnings fell to RM55.32mil from RM79.02mil a year ago despite revenue was up 0.8% to RM965.71mil from RM957.79mil. Earnings per share were 3.50 sen compared with 4.90 sen.

In the first half, its earnings fell 35.7% to RM133.58mil from RM207.93mil. Revenue slipped 13.3% to RM1.631bil from RM1.881bil.

OSK Research said MMHE's first half results were below expectations due to the lack of new and high margin contracts from Petronas and its PSC contractors.

"Hence, we are lowering our FY12-13 earnings by 11%-13%. This accordingly lowers our fair value to RM5.32, after taking into account the earnings downgrade and rolling forward our PER valuation to a FY13 EPS. The call on this stock is still a Neutral," it said.

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