Malaysia Marine and Heavy Engineering said it believes a swift recovery in the global oil market is threatened by the new Covid strain, and so it remains cautious about the prospects of replenishing its order book in the near term.

However, MMHE feels that its new fully operational dry dock number three will provide the advantage of offering more flexible dry docking windows to shipowners once the recovery is in place.

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In reporting its 2020 financial results, MMHE said it achieved a revenue of 1.6 billion ringgit ($396 million) and a pre-tax loss of 401.3 million ringgit, which was mainly attributed to an impairment loss on property, plant and equipment and right-of-use assets amounting to 300 million ringgit.

The company delivered several major contracts during the year including the FSO Golden Star and the external turret for the same FSO; the Bokor phase three re-development central processing platform; the Bergading mercury removal unit ; and the Pluto water handling module.

Ongoing projects include the Kasawari gas development contract and two platforms for the Bekok oil project.

Chief executive Encik Pandai Othman said: “The global oil market has entered the infancy stage of recovery. OPEC+ played a major role in stabilising the market by relaxing production quotas in tandem with global oil demand throughout 2020. However, a swifter rebound looks to be at risk in view of renewed lockdowns in several major oil importing countries to curtail the spread of the new Covid-19 strain.

"As such, we remain cautious on the prospects of order book replenishment in the near term in view of uncertainties surrounding the timing of capital spending by oil majors."

He added that shipowners were tending to opt for dry docking in countries with more relaxed border restriction regulations, but once the industry recovers, the company's new fully operational dry dock would offer more flexible dry docking windows to shipowners.

MMHE's yard operations are continuing to operate at reduced capacity despite the Malaysian government's Movement Control Order from 13 January to 18 February 2021 given that MMHE's businesses are recognised as essential services, which allows the yard to continue to operate.