Dayang Enterprise Holdings Bhd, whose subsidiary has secured a RM802mil contract from Petronas Carigali Sdn Bhd, will see its order book swell to RM1.8bil.
Dayang is also likely to emerge as one of the companies with the strongest earnings growth in the oil and gas sector.
“The latest win puts Dayang's order book at RM1.8bil, giving it five years of earnings visibility. The contract would be on a call-up' basis, and we believe the overall contract value is likely to be higher than the original value because there is almost always additional work required,” said Hwang DBS.
“It was a widely anticipated development. We believe that news on contract flow has been pretty much priced into Dayang but other catalysts have now emerged,” said ECM Libra Investment, adding that the group's recent fund-raising exercise of RM245mil indicated that it was out shopping.
“Whether they are buying new assets (in the form of workboats or barges) or buying out competitors remains to be seen,” ECM Libra said.
The group's wholly-owned subsidiary Dayang Enterprise Sdn Bhd received the contract from Petronas Carigali. It involves the provision of topside structural maintenance services in Sarawak, Sabah and Peninsular Malaysia.
It said the contract was from Feb 2, 2011 until Feb 1, 2016.
Besides the latest job, Dayang has a topside maintainence contract from Shell until 2016, while other contracts include hook-up commissioning projects.
The group said the new project would “contribute positively'' to its earnings and net assets for the financial year ending Dec 31, 2011, and the subsequent financial periods within the duration of the contract.
Managing director Tengku Datuk Yusof Tengku Ahmad Shahruddin, when contacted by StarBizWeek yesterday, declined to reveal the amount of contributions expected. However, analysts have estimated that the contract would contribute between 10% and 15% to the group's 2011 earnings.
Tengku Yusof said the new contract would require two workboats, and that Dayang was expected to take delivery of a new workboat at the end of this year.
The 80m x 22m workboat, costing nearly RM70mil with the capacity for up to 200 people, is being built by Shin Yang Shipping Corp Bhd in Miri, Sarawak.
“If Petronas Carigali requires a third workboat, we may have to charter it from a third party,'' Tengku Yusof added.
Dayang currently owns four workboats, which are on long-term charter to clients, including those in Brunei, and a supply vessel.
Tengku Yusof said the group had tendered for several offshore fabrication and maintenance projects, the outcome of which was expected in the second quarter of this year. “Most of these projects are in Peninsula Malaysia.'' he said.
