KUALA LUMPUR: EA Technique (M) Bhd (EATech) is on track to exit its Practice Note 17 (PN17) status by the first quarter of 2025.
The company said this was due to the implementation of its regularisation plan in 2024 and consistent improvements in revenue and profitability.
Executive director Datuk Wira Mubarak Hussain Akhtar Husin said the marine transportation and offshore storage industry is experiencing an upward trend, and the company is well-positioned to take advantage of this environment.
"Our commitment is to build a stronger, more resilient company that continues to deliver value for shareholders," he said.
EATech was placed under PN17 due to a decline in shareholders' equity after facing complications and setbacks caused by prolonged negotiations and the Covid-19 pandemic.
This resulted in incurred variation costs for its foray into the engineering, procurement, construction, installation, and commissioning (EPCIC) sector to convert a tanker into a floating production storage and offloading (FPSO) facility, has since worked diligently to restructure its financial standing.
With the completion of its regularisation plan mid last year, EATech is now focused on achieving two consecutive profitable quarters, a key requirement for PN17 upliftment.
As of June 30, 2024, EATech reported revenue of RM61.81 million, with a gross profit margin of 41 per cent, above the industry average.
The company logged core profit of RM12.17 million for the first half of 2024, underpinned by a robust order book, with firm contracts valued at RM136.3 million and additional optional contracts worth RM281.2 million.
"Our utilisation rate currently stands at 97 per cent, and with major contracts in place, we are confident of achieving continued profitability. This will enable us to meet the requirements for exiting PN17," he added.
The entry of new shareholders and leaders, including Mubarak and Datuk Lai Keng Onn, is seen as a pivotal moment for EATech. Their acquisition of a 51 per cent stake in the company through Voultier Sdn Bhd has been instrumental in stabilising and growing EATech.
"As new leaders, Datuk Lai and I are committed to steering EATech towards sustained growth and long-term success. Our entry into EATech, as white knights, was not merely about financial investment but also about reshaping and expanding the company's future.
"Together, we saw immense potential in EATech, and our goal is to build on the company's over 30-year legacy while exploring new opportunities within the marine transportation and offshore storage sector. Our partnership is built on a shared vision to sustain EATech as a trusted industry leader while creating greater value for shareholders," he said.
EATech is in the final stages of tendering for several high-value contracts, including an anticipated project with Petroliam Nasional Bhd for the Nautica Tembikai FSO. The company also diversified its client base, recently registering as a vendor with Brunei Shell, opening up new avenues for long-term contracts at higher charter rates.
"We aim to drive resilient future growth supported by a diversified portfolio and long-term partnerships, especially with companies like Brunei Shell, where EATech now serves as an official vendor. We are also the only Malaysian company eligible to bid for jetty operation tenders.
"The growing demand for marine transportation and offshore support services boost our confidence in stability and advancement of portfolio. With strengthened governance and new management, EATech is more agile and well-positioned to seize upcoming market opportunities," added Mubarak.