Destini expects to make an additional RM4.14 million provision following an unfavourable arbitration award
A long-running contract dispute is adding pressure to Destini Bhd’s financial position after an arbitration tribunal ruled that the company must make an additional provision. The decision concerns an invoice claim by Dutch shipbuilder Damen Shipyards Gorinchem BV and is expected to affect the group’s net assets per share.
Highlights
- Destini Bhd and its subsidiary were ordered to pay 3.81 million euros (RM17.2 million) to Damen Shipyards Gorinchem BV under a final arbitration award.
- Destini will make an additional RM4.14 million provision for the second quarter ending 31 Dec 2026, reducing the group’s net assets per share by about 0.75 sen.
- Destini shares rose 2.5% to 20.5 sen on Friday, giving the company a market capitalisation of RM109.86 million despite the award’s financial implications.
This article was translated from the original. Read the original version by our correspondent here.
Award details and financial impact
As reported by The Edge Malaysia, Destini Bhd and its subsidiary, Destini Shipbuilding and Engineering Sdn Bhd, were ordered to pay a total of 3.81 million euros, equivalent to RM17.2 million, to Damen Shipyards Gorinchem BV under the final award in arbitration proceedings, according to a bourse filing on Friday.In the filing, the company said Destini and its subsidiary’s counterclaim for 3.81 million euros was also dismissed, along with all its other claims and counterclaims. Destini had made a provision of RM13.87 million related to the arbitration as at the end of June and now expects to recognise a further provision of RM4.14 million for the second quarter ending 31 Dec 2026 following the final award.
The engineering and defence services provider said the move is estimated to reduce the group’s net assets per share by about 0.75 sen. Meanwhile, Destini is consulting its legal advisers on the final award and the options and remedies available, including the company’s position on payment of the awarded amount.
Background to the dispute and implications for the group
The dispute stems from a material package contract entered into by Damen and Destini Shipbuilding in June 2017, followed by a corporate guarantee provided by Destini. Damen initiated arbitration in 2024, claiming 3.03 million euros, including outstanding amounts under invoices, interest, and storage and insurance costs for goods under the contract.However, the claim for insurance costs was not allowed in the final award. Destini shares ended Friday’s trading up half a sen, or 2.5%, at 20.5 sen, giving the company a market capitalisation of RM109.86 million.
In an earlier article, we explained how the S&P 500 decline was driven by selling pressure amid earnings season and rising bond yields.
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