SAAG records RM27.729m pre-tax loss - (24 Feb 2010)

SAAG Consolidated (M) Bhd, which specialises in servicing the oil and gas sector, recorded a pre-tax loss of RM27.729 million in the financial year ended Dec 31, 2009 compared to a pre-tax profit of RM39.475 million in 2008. Revenue declined to RM160.443 million from RM361.855 million previously, the company said in a filing to Bursa Malaysia here Wednesday. SAAG said the reduction was mainly due to lower revenue recognition based on the progressive percentage of completion method for turbo machinery/rigs, the loss of revenue from the workover rig services operation and the engineering and construction segment. "The group was not aggressive in bidding for projects in 2009 due to commitments to capital expenditure for oil and gas service equipment and this has caused a drain on availability of funds to undertake projects. "This has resulted in a drop in revenue for 2009," it said. Moving forward, SAAG said it expected contribution from the rig services segment and to maximise the returns from its workover rigs in view of the demand for them by oil majors in line with the recovery of the oil and gas industry. It said with the improved market conditions and the company's liquidity, the company was now negotiating and bidding for new projects which included proposals for offshore pipe-laying project using the Spiral Lay method, a technology owned by its subsidiary. "The contribution from these business segments, which command higher margins as compared to the other business segments within the group, is expected to contribute positively to the group's revenues," it said. - BERNAMA