KUALA LUMPUR: Keyfield International Bhd is expected to post strong results for the second (2Q) and third (3Q) quarters as all its vessels will be operating near full capacity following the monsoon season.
Kenanga Research said the majority of its accommodation work barge (AWB) are currently engaged in medium-term charters of six to nine months.
"Should demand for AWBs remain robust, we project that the group could secure a higher daily charter rate (DCR) for FY25.
"Given the tight supply of offshore support vessels (OSV) in Malaysia on robust activities, we expect DCRs to continue rising in the coming month," it said in a research note.
Last week, Keyfield International Bhd's subsidiary Keyfield Offshore Sdn Bhd was awarded two contracts by Hess Exploration and Production Malaysia B.V.
These contracts involve providing one AWB and one anchor handling tug supply (AHTS) vessel for Hess' offshore operations totaling RM40 million.
The contracts began in July 2024 and June 2024, respectively, with charter periods of five months and six months, according to its filing with Bursa Malaysia.
Kenanga said based on its back-of-the-envelope calculation, the implied DCR for the contracted AWB is up to RM200,000, while the DCR for the AHTS is up to USD1.9 per brake horsepower (bhp).
"The estimated DCR for the AWB (RM110,000) is above our assumption while that of the AHTS is within.
"We are positive on the latest development," it noted.
Kenanga said it likes Keyfield due to its presence in the booming AWB subsector on tight supply, its relatively young fleet age of eight years and DP2-rated vessels, which are preferred by clients, as well as a strong war chest by virtue of a low net gearing.
Overall, the firm maintained an "Outperform" call on Keyfield, with a higher target price of RM3 from RM2.85 previously.
Kenanga also raised its FY24-25 net profit forecasts by six per cent and five per cent after adjusting for a higher DCR to RM108,500-128,500 per day from RM104,900-124,000 per day following the contract wins.
Moving forward, it said risks to its call include a significant decline in Brent crude prices, an unexpected vessel downtime due to unplanned maintenance, and a decline in oil producers' capital expenditure planned.