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OPERATING SEGMENTS REVIEW
(I) Operating Revenue
The Group's revenue for the current quarter ended 30 June 2023 recorded at RM31.5 million which was more than doubled the revenue in the previous corresponding quarter. The significant increase in revenue was mainly due to higher utilisation of vessel.
The Group's operating profit for the quarter ended 30 June 2023 recorded at RM7.8 mil as compared to RM1.2 mil loss for the preceding quarter are mainly due to higher vessel utilisation.
The higher revenue for Chartering division in the current period compared to the corresponding period ended 30 June 2023 was mainly due to higher vessel utilisation.
In the current period, Shipbuilding division recorded revenue of RM769K as compared to the revenue recorded in the corresponding period ended 30 June 2022 of RM50K due to increase in ship repair activities.
The Group is optimistic about its prospects going forward as we expect to achieve better results on the back of rising demand for our vessels as we continue to see strong momentum and demand from customers as reflected in our results. The positive outlook augurs well for the Group's financial performance. The Group has achieved a profit after tax of RM7.3 million in this quarter..
We are of the opinion that 2023 would be a bright year for the O&G industry, by and large, mirroring the outlook that Petronas has cast on the prospects of the sector. Based on the release of the Petronas Activity Outlook 2023- 2025, the activity outlook for Petronas remains positive, in line with the continued recovery that we have seen throughout 2022. Specifically, Petronas mentioned that this is positive for activities relating to repair and maintenance activities required to maintain the integrity of offshore facilities. With this, the demand for offshore support vessels is expected to remain steady in 2023, especially for vessels supporting drilling and wells projects. It sees higher demand of offshore supply vessels in 2023-2025 compared with its previous forecast and this is an opportunity for us. It is expected that capex spending to continue its upwards trend in 2023, well surpassing prepandemic levels, on the heels of the massive under-investment throughout the past few years. This will reflect well on shipping sector.
We are confident that the demand for OSVs will continue to strengthen throughout this year. Just as encouraging as the acceleration in demand for OSVs is the continued reduction in the available supply of OSVs. The number of OSVs currently available is very limited indicating that the supply of vessels will continue to decline gradually. Accordingly, it is our view that the industry is positioned to benefit from an increase in demand over medium to long term with a slowly shrinking supply of vessels. We believe this imbalance in supply and demand will continue to provide the opportunity for day rate and utilisation to increase.
We have reduced the group's term loans significantly from RM19 million in December 2022 to about RM15 million in June 2023, a reduction of about 27%. This speaks well of the viability of the Group's business. At the same time, with reduced gearing the Group will have a stronger balance sheet to take on additional financing to fund expansion when opportunities arise.
The Group will continue its emphasis on its core activities of ship building, ship charter and ship repair. The Group's shipbuilding division will be looking towards building vessels which have a niche market as well as enhancing its docking (ship repair) facilities, whilst continuous efforts will be taken towards optimising capacity utilisation of the Group's vessels. The Group is also looking at building new vessels that are more energy efficient and environmentally friendly, in line with tighter environmental regulations in the maritime industry.
Presently the Group is also looking at opportunities to diversify into sustainable investments as part of our responsible investment initiative. We have to be prepared for a drop in fossil fuel demand as consumer preference changes for cleaner and renewable energy. This pivot is necessary and inevitable, and we will be giving careful and due consideration into all factors of three factors of environment, social and corporate governance before embarking on the new initiatives. We will continue to capitalise on our capabilities and reputation in vessel chartering business. Long term sustainability of the business has been our key priority. We will remain resilient in strengthening our core business and shall continue expanding strategically into new opportunities.
We are looking forward to secure more new charters. We have already embarked on initiatives to enhance our bidding competitiveness. These will augment our business and operational resilience and help us deliver projects in line with our customers' needs and expectations. The Group will continue to pursue and seek opportunities to achieve a better financial performance this year. Moving forward, we will leverage our strengths and improve efficiency to achieve better results for the Group.