KUCHING:Dayang Enterprise Holdings Bhd (Dayang), which has made a significant turnaround in its operations and returned to the black, has replenished its order book by more than RM1bil for the next five years.
With the new contracts secured, this has pushed the total order book of the Miri-based marine support services provider to the oil and gas (O&G) sector to over RM3bil.
The contracts in hand are “call out” contracts that will last until 2023, according to Dayang.
On Aug 20, Dayang told Bursa Malaysia that its wholly-owned subsidiary Dayang Enterprise Sdn Bhd (DESB) had been awarded a contract by Kebabangan Petroleum Operating Company Sdn Bhd for the provision of maintenance,construction and modification (PM-MCM) contract (2018-2023).
DESB secured another major contract on July 27,2018 from Murphy Sarawak Oil Co Ltd and Murphy Sabah Oil Co Ltd for the provision of a similar PM-MCM (2018-2023).
Both contracts come with an option to be extended for one year.
According to Dayang, the value of both contracts is based on work orders to be issued during the five-year period.
The contracts include any of all other work and services which are generally related to the scope of works in the contracts at a fixed scheduled of rates.
“Over the past many months,the group has been actively participating in various contract tenders,particularly the Pan MCM contracts which have been estimated to be worth RM3bil to RM4bil.
“We are proud that we have secured a lion share of the Pan MCM jobs from multiple production sharing contractors (PSCs),which speak volume of out strong operational track records,” the company said when commenting on prospects going forward when releasing its second quarter to June 30 (Q2’18) financial results.
Dayang said that the new contracts had further cemented its long -term growth prospects.
In Q2’18, Dayang recorded group pre-tax profit of RM57mil, a reversal from loss of RM35.6mil in Q2’17 as revenue rose by 16% to RM221mil from RM191mil.
In Q1’18,Dayang suffered group loss of about RM36mil on revenue of RM148.8mil.
The company attributed the significant turnaround mainly to higher work orders received and performed under the topside maintenance contracts and higher vessel utilisation rate.
“Business activities have picked up substantially in the second quarter (2018) given the ramp-up in work orders for the maintenance,construction and modification contract (MCM) and topside maintenance services works under the Pan hook-up and commissioning contracts (Pan HUC)
“Consequently,vessel utilisation also witnessed a strong improvement at 70% during the second quarter, compared to a mere 27% in the first quarter.
“This has also reinforced our view that the worst is over after a relatively uninspiring financial performance in 2016 and 2017,” said Dayang.
It added that “taking cue from the work orders in hand, we are hopeful that business operations will remain busy over the coming months which bode well four our financial results.
“Barring any unforseen circumstances,we are optimistic that the turnaround in our earnings will be sustained, premised on our large order book replenishment of more than RM1bil for the next five years and bringing our total order book to more than RM3bil which are call out orders to last until 2023.”