KUALA LUMPUR: Dayang Enterprise Holdings Bhd's orderbook is now valued at RM5.4 billion following the award of two pan-Malaysia services contracts from Petronas Carigali Sdn Bhd, said Public Investment Bank Bhd (PublicInvest).
Dayang Enterprise yesterday announced that it secured two contracts for the provision of pan-Malaysia maintenance, construction, and modification (MCM) as well as hook and commissioning (HUC) services for Package A3 (Sarawak Asset SKA Oil) and Package A5 (Sabah Asset SBA Southern) for five-years, with options to extend for an additional three years and subsequently another two years.
Although the value of the new contracts were not announced as it is based on call-out work order, PublicInvest estimates the combination of both contracts is worth RM3 billion for the first five years.
The research firm said the RM5.4 billion orderbook consist of RM4 billion from three MCM and HUC contracts for the next five years, RM1.2 billion Asset Integrity Findings (AIF) until 2026, while the remaining is the expiring MCM and HUC contracts, which is reaching its tail-end by December 2024.
The firm said Dayang Enteprise's job win of the largest MCM and HUC package from Sarawak Asset Oil portion despite tight competition, is a testament of Dayang Enterprise prominent track records, readiness facility, financial and manpower capacity to execute the contract.
"We believe Dayang Enterprise's strong establishment in Sarawak is vital to ensure the operational efficiency in executing MCM and HUC contracts in the state.
"On this note also, we believe the company would be the frontrunner for decommissioning work packages especially in Sarawak, which is expected to be awarded in mid-2025/2026," it said in a research note.
On Dayang Enterprise's upcoming earnings for the third quarter of financial year 2024 (3QFY24), PublicInvest said expects its marine segment to continue to record significant growth on the back of higher daily charter rate and elevated utilisation rate.
To recap, Dayang achieved 91 per cent of utilisation rate in 2QFY4 and PublicInvest believes 3QFY24 utilisation rate will remain at the similar level or higher.
"Meanwhile on its topside maintenance segment, we expect a slight weakness on quarter-on-quarter given the existing MCM and HUC contracts are reaching the tail end.
"Overall, Dayang Enterprise would record significant earnings growth on yearly basis, however, flattish or slight weaker on quarterly basis," it added.
The share price of Dayang Enterprise closed at RM2.18 on Wednesday, down 1.8 per cent or 4 sen with its market capitalisation worth RM2.5 billion.