Analysts positive on Dayang’s prospects for 2017
KUCHING: Analysts at the research arm of Public Investment Bank Bhd (PublicInvest Research) foresee bright prospects for Dayang Enterprise Holdings Bhd (Dayang) this year.
The research firm in a report yesterday said Dayang remains a strong contender for more jobs going forward with the company’s execution capabilities and positive track record with its clients.
Following a company’s briefing, the research firm opined that Dayang could be a beneficiary of potential maintenance jobs for the oil and gas (O&G) industry as national oil corporation Petroliam Nasional Bhd ( Petronas) recalibrates its budget and capital expenditure plans.
Meanwhile, the research firm observed that Dayang’s core activities saw improvements in its long term call-out contracts worth approximately RM3 billion poised to last until 2018.
Besides that, PublicInvest Research noted the company’s out- look is supported by an outstanding tender book of approximately RM4 billion.
Additionally, the research firm believed the group’s overall performance have been showing signs of improvement since the third quarter of 2016 (3Q16) encouraged by increased activities and the group’s efforts to aggressively bid for both domestic and international tenders.
In a separate note, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) believed that Dayang is well positioned to be one of the potential beneficiaries of Petronas’ five-year maintenance, construction and modification (MCM) contract.
It gathered that the MCM contract is expected to be awarded by the second quarter of 2017 (2Q17) and has an estimated total value of RM5 billion to RM6 billion.
Kenanga Research also gathered that the contract is split into six packages and the Sarawak’s MCM portion is the biggest pie estimated to be worth approximately RM1.5 billion. Hence, the research firm opined that Dayang has the potential to win the Sarawak portion of the MCM contract given that the company is the incumbent for the Sarawak topside maintenance contract.
Meanwhile, Dayang in a filing to Bursa Malaysia on Wednesday said earnings for the fourth quarter of 2016 (4Q16) soared by 186 per cent year-on-year (y-o-y) to RM47.09 million from RM16.48 million recorded in 4Q15.
However, it observed that 4Q16 revenue decreased by 16 per cent y-o-y to RM185.61 million from RM221.67 million generated in 4Q15. Dayang explained that the lower revenue recorded in 4Q16 as compared with 4Q15 was due to lower vessel utilisation rate and work orders received and performed.