KUCHING: Dayang Enterprise Holdings Bhd (Dayang) could potentially post higher earnings in the first quarter of 2015 (1Q15) as compared to 1Q14.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) yesterday said the oil and gas (O&G) services company could report better financial performance for its 1Q15 results due by the end of this month supported by contribution from robust activities for its Pan Malaysia hook-up commissioning (HUC) job as well as contribution from its associate company, Perdana Petroleum Bhd (Perdana Petroleum).
MIDF Research said, “With the robust activities level achieved in the first three months of this year coupled with the modifications works secured from Petronas Carigali Sdn Bhd (Petronas Carigali) in Dec 2014 worth approximately RM280 million, we anticipate Dayang to post earnings in excess of RM35 million in 1Q15.
“In addition to that, we are also anticipating additional earnings boost from its associate company, Perdana Petroleum to contribute to the commendable results,” the research firm believed.
Activity levels for Dayang in 1Q15 remained strong with projects from Sarawak Shell Bhd, JX Nippon Oil & Energy Corporation and Petronas Carigali recording good progress.
Nonetheless, it observed that the HUC and topside maintenance works from Murphy Sarawak Oil Co Ltd has experienced a slight decline in activities level due to rescheduling and reorganisation of work activities.
To recap, Dayang has an outstanding orderbook of approximately RM4 billion, largely consisting HUC and topside maintenance job orders.
The research firm also noted that the company has since expanded its focus into the other segments of the O&G value chain such major modification works (involving major design and engineering capabilities) and facilities improvement works.
Additionally, MIDF Research observed that the company has a tenderbook of approximately RM800 million, focusing on the sub-segments of the oil and gas value chain.
Given the steady progress of the company’s workflow on the Pan Malaysia job and a strong outstanding orderbook which is expected to support the company’s earnings over the medium term, MIDF Research has maintained its ‘buy’ recommendation on Dayang, valuing the company’s share price with a fair value of RM3.82 per share.