MANY CONTRACTS TO DATE: This is Alam Maritim’s 12th contract announcement for 2013 and brings its YTD total contract wins to RM1.17 billion, surpassing the cumulative contract wins of RM528.7 million in 2012.
KUCHING: Alam Maritim Resources Bhd (Alam Maritim) recently announced that it had received two award letters from an established oil and gas company.
These awards were for the provision of one anchor handling tug vessel for the primary period of 12 months with an optional period of six months and one unit straight supply vessel for a period of 12 months with an optional period of another 12 months.
According to research arm of Kenanga Investment Bank Bhd’s (Kenanga Research), the total value of the contracts is approximately RM37 million (inclusive of the optional periods if exercised by the client).
This is Alam Maritim’s 12th contract announcement for 2013 and brings its year to date (YTD) total contract wins to RM1.17 billion, surpassing the cumulative contract wins of RM528.7 million in 2012.
“We believe the average daily charter rate (DCR) for the contract is circa RM1.80-1.90 per bhp, which is decent for such vessels as we estimate one to be a 5000bhp vessel.
“We also believe that Alam’s outlook has definitely improved and are heartened with its continuing wins,” Kenanga Research opined.
The research arm also predicted that the continuing contract awards in the market also signify that there is potential for improvement in offshore support vessel market.
As the group is aiming to secure a total of RM2.5 billion contract sum in 2013, expected offshore support vessel (OSV) wins include those for the company’s wholly-owned OSVs.
There are six to seven vessel contracts up for expiry soon and Alam Maritim has also taken delivery of two 12k bhp anchor handling tug supply (AHTS), which is likely to secure contracts within the next one to two months.
Other OSV expected wins include those for its inspection, repair and maintenance (IRM) segment and third-party charters for accommodation barge or platform supply vessel contracts.
For its offshore industry committee (OIC) business, Alam Maritim is looking to either secure a portion of the upcoming Pan Malaysian Transportation and Installation project (to be awarded within the year), or at least work on subcontract works for the main incumbents, namely SapuraKencana Petroleum Bhd.
The research arm noted that Alam Maritim did not rule out asset acquisitions via joint-venture for the inspection, repair and maintenance segment (diving support vessels) to improve its chances for contract wins.
Overall, Kenanga Research maintained its estimates for now given that it had already assumed at least 85 per cent utilisation for its vessels in financial year 2013.
As such, it maintained its ‘outperform’ rating on the stock, with its target price of RM1.91 per share is based on unchanged current year 2014 price earnings ratio of 14-fold.