KUCHING (June 15): Dayang Enterprise Holdings Bhd (Dayang) has guided on increasing offshore support vessel (OSV) charter rates, higher blended utilisation rates for Perdana Petroleum Bhd’s (Perdana) OSV fleet in the second quarter (2Q) and better job win and execution prospects in financial year 2022 (FY22) and FY23 -– as guided from the Petronas Activity Outlook 2022.
According to the research arm of Hong Leong Investment Bank Bhd (HLIB Research), Dayang guided that the OSV charter rates has increased by a total of three to five per cent year on year (y-o-y) as the number of OSVs in the market has declined over the years as many OMS companies have totally exited the industry while some have gone bust following the slump in oil prices from 2015-2020.
“Also, management has guided that the division’s blended fleet utilisation rates have increased substantially to more than 70 per cent in 2Q22 (from 38 per cent in 1Q22) – which is higher than the guided net profit breakeven level of 60-65 per cent,” HLIB Research noted following a conference call with Dayang.
With that, the research arm believed that 63.7 per cent-owned Perdana will turn into the black in 2Q-3QFY22.
HLIB Research gathered that the outlook for OSVs are expected to be slightly better in 2022 as there are a total of 336 support vessels (Production: 138; Drilling: 198) expected to be chartered throughout the year as compared to 289 support vessels (Production: 151; Drilling: 138) in 2021.
“Petronas has guided that there will be consistent demand for vessels supporting production operation over the next three years.
“Meanwhile, higher hook-up and commissioning (HUC) and maintenance, construction and modification (MCM) man-hours are also expected for 2022 (HUC: 6.3, MCM: 11.5) as compared to 2021 (HUC: 4.7, MCM: 8.5).
“Also last week, Petronas raised its 2022 total capex guidance to RM60 billion (from RM40 billion to RM 45 billion previously).
“As we deem Dayang the market leader for MCM/i-HUC activities, we are confident that the group will be a major beneficiary of this development.”
Additionally, HLIB Research recapped on the group guiding that Covid-19 has served as a major headwind, which gave rise to its weak performance in FY20-21 due to several issues.
These included manpower or labour issues and more stringent Covid-19 related standard operating procedures (SOPs), which resulted in higher accommodation expenses, testing requirements and quarantine time.
“Dayang has guided that these headwinds are waning off in FY22 and the group should be able to execute its jobs more efficiently.
“We highlight that the group’s current outstanding orderbook stands at RM1.8 billion, which will provide earnings visibility until end-FY23 and has a tenderbook of circa RM800 million.”