Malaysia’s UMW Oil & Gas posted loss before tax of RM68.4 million in Q1 2016 as opposed to the RM42.5 million of profit before tax achieved in Q1 2015.
Weak demands for the group’s drilling and oilfield services due to low oil prices had caused both its drilling and oilfield services segments to incur losses.
UMW’s revenue of RM87.7 million for the first quarter was lower than the RM312.5 million registered in the same quarter of 2015 by RM224.8 million or 71.9%. While the drilling services segment saw income of RM81.3 million, the oilfield services division contributed revenue of RM6.4 million.
UMW said as some existing contracts are expiring this year, it expects lower drilling and workover activities in the near future. While the day rates remain lower in line with the global market, the reduction in utilization is being cushioned with the support of Petronas and other regular clients. The near term volatility will continue to pose challenges to the firm in 2016.
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