PETALING JAYA: Coastal Contracts Bhd
’s prospects are expected to be supported by its cash position as well as extensive capital expenditure plans and inventory build-up, analysts say.
TA Research said the group is leveraging its cash position, which is expected to surge to nearly RM1bil following the repayment of US$155mil from its Mexican joint venture this week and an additional US$10mil in the first quarter of 2025 (1Q25), to pursue significant growth initiatives.
“The group is targeting two medium-sized production-related infrastructure projects, such as floating production storage and offloading (FPSOs) vessels or mobile offshore production units, in South-East Asia and three renewable energy projects, including wind and solar farms, through partnerships with experienced industry players who will hold majority stakes to mitigate risks,” the research house said in a report yesterday.
According to TA Research, Coastal Contracts plans to invest up to RM100mil in a new resort and up to RM200mil in a vessel-building programme.
“Moreover, we assume Coastal Contracts may allocate approximately RM100mil for renewable-energy projects and RM200mil for infrastructure ventures. Management projects RM600mil in vessel sales from the second half of 2025 (2H25) to 1H27, reflecting its focus on long-term earnings growth and operational expansion while capitalising on its strengthened financial position.”
The group has also been advancing its gas processing operations, supported by Mexico’s national oil company Petróleos Mexicanos’ plans to expand the Papan Plant’s capacity and modify the Perdiz Plant to incorporate liquefied petroleum gas recovery.
This expansion is anticipated to be finalised by early next year. In the meantime, gas processing volumes at both facilities have continued to ramp up as planned, reaching their respective maximum capacities.
