PETALING JAYA: Deleum Bhd
is expected to see earnings momentum improve over the coming quarters, underpinned by sustained demand for well intervention services, resilient upstream activities and growing opportunities in the gas turbine segment, despite lingering geopolitical and operational uncertainties.
Analysts view the oil and gas services provider as being well positioned to benefit from increased maintenance spending and production enhancement activities, as energy producers sought to maximise output amid elevated crude oil prices and heightened energy security concerns.
UOB Kay Hian (UOBKH) Research said the current environment of high oil prices and heightened energy security demand – both of which may persist post-Iran war – may be a material catalyst for the well intervention market.
“Well intervention services represent a low-hanging opportunity that oil majors can easily tap into to boost domestic volume production,” the research house said.
UOBKH Research added that this would create opportunities for Deleum to undertake more slickline jobs than initially planned, due to the limited number of reliable local operators.
It said the company could expand capacity through third-party units when required and forecast that the positive earnings surprise seen in the first quarter ended March 31, 2026 – partly due to cost control – may resume its momentum for at least a few quarters ahead.
UOBKH Research retained its “buy” call with a target price of RM1.75, pegged to an unchanged eight times 2026 forecast price-earnings ratio.
It views Deleum as a key beneficiary of maintenance-related activities and highlighted its ability to sustain a 50% dividend payout despite annual capital expenditure requirements of RM60mil to RM70mil, supported by a lean balance sheet and stable cashflow generation.
