Malaysia Marine and Heavy Engineering (MMHE) saw earning drop by almost two-thirds in 2015 to MYR43.9m ($10.6m) from MYR129.9m in 2014, while revenue fell 8.9% to MYR2.46bn against MYR2.7bn in 2014.

The decline in in net profit from an already low level previously was unsurprisingly, due to lower contribution from MMHE’s offshore segment as well as the impact from recognition of impairment on both goodwill (MYR62.8m) and assets (MYR37m), the group said in a stock market statement.

“This is taken in view of the continued depressed outlook for the oil and gas industry with the drop in crude oil prices,” it said .

Offshore registered lower revenue during the year mainly due to lower number of projects secured than anticipated. The segment recorded lower operating profit of MYR9.2m compared to MYR64.7m a year ago mainly due to additional completion costs for the Malikai TLP.

Compensations and claims are being actively pursued to improve the financial position of this project, MMHE said.

Meanwhile, the marine services segment recorded higher revenue and operating profit mainly due to higher value for vessels repaired from LNG, Rigs, FSU and FPSO categories.

For the second year running, the group recorded a full capacity of 15 vessels and rigs in its docks under simultaneous repair and refurbishment works.

“The tough operating environment in the upstream segment is projected to persist well into 2017 as national and international oil companies continue to reduce their spending on capital and operating expenditure. This will continue to impact offshore business,” said md and ceo Abu Fitri Abdul Jalil.

He added that the marine business is projected to remain vibrant as the firm tanker charter rates in the marine segment will somewhat mitigate the slowdown of the offshore unit.

“The group’s effort to diversify has borne results with the recent awards of work in the RAPID projects. MMHE remains committed in executing the strategic plan and initiatives laid out earlier to weather this challenging period,” he said.