Dayang’s latest results, award lead to upward revision of forecasts
KUCHING: Dayang Enterprise Holdings Bhd’s (Dayang) latest results for the third quarter (3Q) and nine months (9M) ended September 30, 2018, along with the latest maintenance job award, has led to analysts revising upwards their earnings forecasts for the group.
Dayang’s financial statement filing on Bursa Malaysia revealed that the group’s profit attributable to ordinary equity holders of the parent for the 3Q of financial year 2018 (3QFY18) amounted to RM48.75 million, up from RM1.12 million in the corresponding quarter of the previous year.
As for 9MFY18, Dayang recorded an impressive RM66.5 million in profit, compared to a loss of RM89.68 million in the corresponding period -to-date ended September 30, 2017.
“Due to the strong earnings recorded during the quarter under review, we are revising our FY18F earnings upwards to RM87.8 million as we revise our vessel utilisation assumption higher,” the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said.
“However, we are maintaining our FY19F earnings estimate at this juncture.”
Meanwhile, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) has revised its FY18-19E earnings upwards by 33-21 per cent. This was after Kenanga Research raised its orderbook replenishment assumption to RM2.3 billion, from RM1.5 billion previously, while narrowing its loss assumption for Dayang’s marine charters.
Kenanga Research’s upward revisions on earnings forecasts had also taken into consideration Dayang’s latest maintenance job award.
On a separate Bursa filing, Dayang also announced that wholly-owned subsidiary Dayang Enterprise Sdn Bhd had been awarded a subcontract by Gujurly Inzener for the provision of facilities maintenance support in Turkmenistan operated by Petronas Carigali (Turkmenistan) Sdn Bhd.
“No contract value was disclosed, as it will be dependent of work orders received, but we estimate the value at around RM400 million,” the research arm said.
“We are positive on the award as it represents Dayang’s first venture overseas, highlighting its job execution competency as well as its competitiveness.
“This brings year to date (YTD) wins to circa RM1.5 billion, and order-book to circa RM3.4 billion.”
On a side note, Kenanga Research foresees some possible overhang from Dayang’s 60.5 per cent-owned subsidiary Perdana Petroleum Bhd (Perdana), despite the group being positioned to benefit from the topside maintenance space on the back of an increasing work orders trend following continued maintenance deferments in the past few years.
“Currently sitting at net gearing of 1.3-fold, Perdana had indicated a possible debt restructuring or corporate exercises in the next 18 months or so, under the purview of the Corporate Debt Restructuring Committee ( CDRC) by Bank Negara Malaysia, in which we opine may implicate Dayang.”