Tanjung Offshore up on new contract


  • Business
  • Wednesday, 04 Oct 2006

Koon@thestar.com.my 

PETALING JAYA: Tanjung Offshore Bhd shares closed at the day's high of RM2.56 yesterday for a 14 sen gain after the company announced on Monday it had won a RM10mil contract to supply low and high voltage switchgear packages from Larsen & Toubro Ltd. 

The switchgear will be installed for Petronas Penapisan (Melaka) Sdn Bhd's Melaka Group 3 Lubricant Base Oil Project. The contract is expected to be completed by March next year. 

The company has been actively seeking new contracts and partners, even before its transfer to the Bursa Malaysia main board on Sept 8. Tanjung Offshore also has clinched a RM13mil contract to provide gas turbine maintenance services to Petronas Carigali for five years. 

In a research note, Hwang DBS Vickers said the company might secure more new contracts in the fourth quarter. Tanjung Offshore, it said, was also expected to directly benefit from the ongoing exploration activities undertaken by Malaysia’s oil and gas players. 

OSK Securities has, in the meantime, upgraded its rating on Tanjung Offshore to a buy, in the light of the newly won contracts, as well as anticipated ones. The research house also raised its net profit forecast for Tanjung Offshore by 10.7%, as well as upgraded the revenue forecast for the company's engineering equipment division by 3.5% and margins to 8% from 7.7%. 

This was based on the delivery of two new vessels to the company by the end of the month, it added. 

OSK Securities said Petronas, a client, would be releasing more contracts soon and believed Tanjung Offshore was trying to lock in long-term contracts for the new vessels. The company is also expected to secure other contracts before ordering new ships. 

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