KUCHING: Alam Maritim Malaysia Sdn Bhd (Alam Maritim) which is the 100 per cent subsidiary of Alam Maritim Resources Bhd has been awarded two long-term vessel contracts by established oil majors.
NEW CONTRACTS: Alam Maritim wins RM102 million of charter contracts following the award of two major long-term vessel contracts
Alam Maritim is expected to provide one accommodation vessel for RM40.0 million and one accommodation work barge for RM43.2 million.
OSK Research Sdn Bhd (OSK Research) said in its research report that work on both contracts were expected to start immediately.
The first contract was for a primary period of three years with two extension options of one year each while the second was for a primary period of 13 months with 2 extension options of one year each.
The research house was not surprised that the company was awarded the contracts given its ample experience of operating in Malaysian waters. More than 60 per cent of its jobs are for Petronas and its production sharing contract (PSC) contractors.
Another research report by AmResearch Sdn Bhd (AmResearch) said that with these two contracts, Alam Maritim had won a total of RM102 million of charter contracts this year.
On a daily basis, the work barge would command a rate of an estimated RM110,000 while the accommodation vessel would fetch a daily rate of RM37,000 which were almost similar to rates achieved last year.
However, both research houses did not alter their earnings estimates for the company as they had already assumed renewal of contracts.
On the other hand, OSK Research said that the pipelay barge business between Alam Maritim and Swiber Marine Sdn Bhd (Swiber) would be delivered by June this year.
The initial purpose of the work barge was to assist in major pipe-laying works rather than leading a project itself.
However the joint venture company might consider tendering for pipe-laying works directly from Petronas and its PSC contractors in the second wave of pipe-laying contract.
The research house believed more vessel contract awards would be coming up in the second half of 2010 to support the installation of pipelines and facilities in Malaysia.
With regard to this, it was believed that Alam Maritim would be a preferred candidate, as it owned an all-Malaysian flagged fleet of vessels that were new and unlikely to break down.
As a result the target price for the company was pegged at RM2.99 per share.