Deleum’s latest MCM contract to be earnings accretive from 2018

KUCHING: Deleum Bhd’s (Deleum) contract for the maintenance, construction and modification (MCM) services for Petronas Carigali Sdn Bhd (Petronas Carigali) gained neutral views from analysts as the contract is only expected to be earnings accretive from end-financial year 2018 (FY18) onwards.

In an announcement on Bursa Malaysia, Deleum’s subsidiary company, Deleum Primera Sdn Bhd (Deleum Primera) was awarded the contract from Petronas Carigali for MCM services on Package (C) Peninsular Malaysia Offshore Gas.

The contract duration is for a period of five-years on a callout basis. The scope of works will generally include Topside Structural Maintenance, Hook Up and Commissioning and Facilities Improvement Programme.

MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) noted that Deleum will be partnering Icon Offshore Bhd (Icon Offshore) to provide offshore support vessels ( OSV) for the works to be undertaken under the MCM contract. Icon Offshore will work under the capacity of a subcontractor to Deleum.

Since the news of the impending contract win was rife on the newswires, it noted that Deleum’s share price has appreciated by more than 26 per cent. It pegged a ‘trading sell’ position on the stock initially. However, Deleum’s share price has since retreated over three per cent since its pre-announcement rating.