Second consecutive win for Dayang
KUALA LUMPUR: Analysts laud Dayang Enterprise Holdings Bhd’s (Dayang Enterprise) wholly-owned subsidiary, Dayang Enterprise Sdn Bhd, bagging a contract from Mubadala Petroleum’s entity, MDC Oil and Gas (SK320) Ltd, to provide Pan-Malaysia maintenance, construction and modification (MCM) services.
This came just a day a er its announcement of a contract extension by Sarawak Shell.
Dayang said the total value of the Mubadala Petroleum contract is not fixed and will depend on the actual scope based on work orders to be issued by the client from time to time throughout the duration of the contract.
“The contract is effective from December 9, 2020 and expires on July 16, 2023, with an option to extend for a period of one year,” it said in a filing with Bursa Malaysia on Thursday.
Public Investment Bank Bhd (PublicInvest Research) is positive over this contract given the new addition to its portfolio, providing Dayang with opportunities to secure more contracts in the future.
“We understand that this contract is for a newly completed platform, hence work order to be issued is rather smallish estimated to be around RM10 million,” it said iesterday.
“Nevertheless, we expect the new addition to its portfolio would provide opportunities to secure more new contracts in the future. While this contract is expected to generate new income stream, it also demonstrates that jobs are still available in the sector.”
PublicInvest Research’s earnings forecasts for Dayangremain unchanged, as it has assumed this under its annual orderbook replenish assumption of circa RM200 million per year.
“Dayang’s outstanding orderbook remains strong at RM3.6bn. While no contracts have been terminated during the recent “crisis”, most work orders which are largely based on call-outs would likely have been deferred in 2021 given the uncertainty and volatile oil prices.”
While no contract values were disclosed in the announcement, as the actual contract values will be dependent on work orders issued by the client, analysts with Kenanga Investment Bank Bhd (Kenanga Research) estimated the total value of the contract to be rather smallish at roughly less than RM20 million.
“In context, this is less than one per cent of the group’s orderbook of RM3.5 billion,” it compared. “In Malaysia, Mubadala operates the Block SK320 development, offshore Sarawak, which is its first development domestically.
“This block is a relatively new development, with final investment decision achieved in 2018 and first gas expected only in the third quarter of 2021 (3Q21). As such, we do not expect the platform to require any major maintenance activities in the near future.