Phillip Capital Research said it expects the group’s vessel utilisation in 4Q24 to be higher than the 58% recorded in 4Q23.
PETALING JAYA: Dayang Enterprise Holdings Bhd
’s fourth-quarter (4Q24) earnings could come in stronger year-on-year, driven by higher overall work orders, increased vessel utilisation rates and improved daily charter rates.
Phillip Capital Research, in a note to clients yesterday, said it expects the group’s vessel utilisation in 4Q24 to be higher than the 58% recorded in 4Q23.
This is primarily due to the need to complete work orders ahead of the expiration of the previous hook-up and commissioning, and maintenance, construction and modification (MCM) contract in December 2024.
“With the recent contract wins driving a record-high order book, we remain positive on the 2025 earnings outlook.
“Our ground check with Dayang suggests that activities remain intact. The key takeaway is the larger-than-expected order book value of RM6.2bil (versus our prior estimate of RM5.2bil), which could drive an upside to our earnings forecast,” said the research house.
Phillip Capital Research noted that Dayang has been a key beneficiary of the latest Petroliam Nasional Bhd’s (PETRONAS) Pan Malaysia MCM contract, accounting for 80% of the current order book.
“Management guided that there have been no signs of a slowdown in work orders despite concerns about possible capital expenditure cuts from PETRONAS.”
As a Sarawak-based company, the research house said Dayang will be one of the primary beneficiaries under Petroleum Sarawak Bhd (Petros), which has been appointed as the sole gas aggregator for Sarawak since February last year.
It was reported on Wednesday that issues regarding gas distribution rights in Sarawak had been resolved through a series of negotiations.
Meanwhile, Phillip Capital Research said demand for offshore vessels remains healthy for the marine business, with high utilisation rates for vessels owned by Dayang and its 63.5%-owned Perdana Petroleum Bhd.
“Management anticipates a 4%-5% increase in charter rates, driven by the ongoing vessel supply shortage, which will further strengthen margins.
“The 16% pullback in share price over the past three months presents a strong opportunity to accumulate,” it said.
The research house kept its “buy” rating with at target price of RM4.50 per share.
