SHAH ALAM: Boustead Heavy Engineering Corporation (BHIC) announced today that it has been awarded two contracts with a combined value of RM140.06 million from the Defence Ministry. According to its filing with Bursa Malaysia, its wholly owned subsidiary, BHIC Submarine Engineering Services Sdn Bhd (BSES) was awarded the two separate contracts.

The first contract for RM99.8 million is for interim in-support services for the Royal Malaysian Navy’s (RMN) two Scorpene class submarines, KD Tunku Abdul Rahman and KD Tun Abdul Razak. The contract period is 11 months, from March 15 this year to Feb 14, 2024.

The other contract saw BSES awarded an extension of the RMN submarine facilities upkeep contract worth RM40.26 million. The contract is for 12 months, from Jan 1 to the end of December this year. This contract is likely an extension to the same contract awarded in April 2021. That contract worth RM78.14 million for a period of two years, from Jan 1, 2021, to Dec 31, 2022.

BHIC stated in the two announcements that a formal contract between the Government of Malaysia and BSES will be finalised and executed at a later date. The later date is likely at LIMA 2023 starting next week.

From the Edge:

BHIC posted a net loss of RM21.55 million for the financial year ended Dec 31, 2022 (FY2022) compared with a net profit of RM15.19 million a year earlier, due to higher allowances for expected credit losses, finance cost and operating expenses.

Revenue for the year also decreased to RM141.76 million from RM149.19 million in FY2021 on lower submarine contracts and other defence-related maintenance, repair and overhaul (MRO) projects.

“The increase in the group’s receivables of RM25.3 million and payables of RM86.7 million in FY2022 was mainly due to amounts owing from or to related companies,” said BHIC in its filing.

— Malaysian Defence