Deleum’s Q2 2025 Report: Navigating Growth with a Dividend Surprise
Deleum Berhad, a key service provider in Malaysia’s robust oil and gas sector, has just released its financial results for the second quarter ended June 30, 2025. The report reveals a story of impressive top-line growth, driven by a stellar performance in one of its core divisions. However, the bottom line faced some headwinds from external market factors. For investors, the highlight might just be the rewarding announcement of a 4.00 sen interim dividend, signaling the management’s confidence in the company’s future.
Let’s dive into the numbers and see what’s driving Deleum’s performance.
Financial Performance Overview
At a glance, Deleum’s second quarter shows a healthy increase in revenue, but a slight dip in profitability when compared to the same period last year. This contrast highlights the dynamic challenges and opportunities within the O&G sector.
For the second quarter of 2025, Deleum’s revenue grew by 4.9%, but net profit attributable to shareholders saw a decrease of 12.5% year-on-year, primarily due to foreign exchange losses and higher operating costs.
Q2 2025 (Current Quarter)
Revenue: RM 236.9 million
Profit Before Tax: RM 36.3 million
Net Profit Attributable to Shareholders: RM 19.6 million
Q2 2024 (Comparative Quarter)
Revenue: RM 225.9 million
Profit Before Tax: RM 37.5 million
Net Profit Attributable to Shareholders: RM 22.4 million
However, looking at the first half of the year (Year-To-Date), the picture is more positive, with both revenue and profit showing solid growth. This suggests that despite the quarterly fluctuations, the company’s overall trajectory remains on an upward trend.
| Financial Metric | Q2 2025 (RM’000) | Q2 2024 (RM’000) | Change (%) | YTD 2025 (RM’000) | YTD 2024 (RM’000) | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 236,878 | 225,905 | +4.9% | 416,299 | 387,324 | +7.5% |
| Profit Before Tax | 36,259 | 37,526 | -3.4% | 64,543 | 54,804 | +17.8% |
| Net Profit (for the period) | 26,886 | 27,758 | -3.1% | 47,392 | 40,474 | +17.1% |
| Earnings Per Share (sen) | 4.88 | 5.57 | -12.4% | 7.97 | 7.88 | +1.1% |
Segment Spotlight: A Tale of Two Divisions
Deleum’s performance is best understood by looking at its two main business segments: Power and Machinery (P&M) and Oilfield Integrated Services (OIS).
Power and Machinery (P&M)
The P&M segment, traditionally a major contributor, saw its revenue decrease by 6.9% to RM 164.5 million this quarter. This was mainly due to lower sales of exchange engines and turbine parts. Consequently, the segment’s profit before tax fell by 8.6% to RM 27.9 million, impacted not just by lower revenue but also by foreign exchange losses and higher operating expenses.
Oilfield Integrated Services (OIS)
The OIS segment was the star performer this quarter. Revenue surged by an impressive 46.9% to RM 72.2 million, driven by increased activities in Maintenance, Construction, and Modification (MCM) projects. This strong top-line growth translated into a 38.7% increase in profit before tax to RM 9.6 million, showcasing the segment’s growing importance to the Group’s overall health.
Navigating the Tides: Risks and Future Outlook
Deleum’s management remains “cautiously optimistic” about the remainder of the year. The Malaysian oil and gas sector is expected to remain resilient, providing a stable operating environment. The company’s future growth appears to be anchored by a clear strategy of regional expansion and a strong existing order book.
A key growth catalyst is the recent acquisition of a 70% stake in PT OSA Industries Indonesia (OSAII), which has already started contributing to the Group’s revenue. This move marks a significant step in Deleum’s regional expansion strategy.
The company is well-positioned for the near future with a robust order book of approximately RM 1.5 billion across its P&M and OIS segments. This provides strong earnings visibility for the upcoming quarters. However, the company acknowledges potential risks, including the inherent volatility of oil prices and uncertainties in the global economic landscape, which can impact operations and profitability.
Summary and Investment Recommendations
Deleum’s Q2 2025 results present a mixed but ultimately promising picture. The significant growth in the Oilfield Integrated Services segment successfully offset the temporary slowdown in the Power and Machinery division, leading to overall revenue growth. While short-term profitability was affected by currency fluctuations and costs, the year-to-date performance remains strong. The strategic expansion into Indonesia and a healthy order book lay a solid foundation for future growth. Please note, this analysis is for informational purposes only and does not constitute any investment recommendation.
Key takeaways for investors:
- Strong OIS Growth: The Oilfield Integrated Services segment is emerging as a powerful growth engine for the company.
- Regional Expansion Strategy: The acquisition in Indonesia is a clear signal of Deleum’s ambition to become a regional player, reducing its dependency on the domestic market.
- Solid Order Book: An order book of RM 1.5 billion provides a good degree of certainty for future revenue streams.
- Commitment to Shareholders: The declaration of a 4.00 sen interim dividend is a positive sign of the Board’s confidence and its commitment to rewarding shareholders.
- Market Headwinds: Investors should remain aware of external risks such as foreign exchange volatility and oil price fluctuations, which can impact quarterly earnings.
From my professional viewpoint, Deleum appears to be in a strategic phase of transformation. While the P&M segment navigates its cyclical challenges, the remarkable growth and strategic expansion centered around the OIS division present a compelling narrative for the company’s future. The key to long-term success will be the effective integration of its new Indonesian subsidiary and prudent management of macroeconomic risks.
What are your thoughts on Deleum’s regional expansion strategy? Do you believe it will be a key driver for its next phase of growth?
Share your insights in the comments section below!
