Analysts upbeat about Serba Dinamik securing more jobs

PETALING JAYA: Serba Dinamik Holdings Bhd is anticipated to secure more projects that will provide the company with good earnings visibility over the next three years.

Kenanga Research, in a report, expected more contract wins for the oil and gas company, as management targets its order book to reach RM10bil by end-2019.

“While the group’s overall jobs replenishment is still reliant on its stronghold markets in the Middle East and locally, we expect more jobs flow to also come from central Asia as the company aims to expand into the region.

“Overall, we made no changes to our 2018 to 2019 forecasts as the announced contract wins are still within our 2019 replenishment assumption of RM2.5bil.”

Separately, Public Investment Bank Research noted that Serba Dinamik would be announcing its fourth quarter 2018 earnings numbers on Feb 27.

“Despite reporting lower third quarter numbers due to seasonal factors and meeting only 70% of our forecast, we expect the earnings should pick-up in the fourth quarter on the back of robust operations and maintenance activities particularly in Saudi Arabia, Qatar, Oman, and Turkmenistan towards the end of the year.

“We anticipate fourth quarter 2018 net profit to be in line with our estimates at around RM116mil, translating to a 39.4% quarter-on-quarter and 44.1% year-on-year growth.”

Meanwhile, the company announced yesterday that it had won contracts in Uzbekistan, UAE and Qatar worth a combined US$110mil.

The group also announced the award of six separate oil and gas contracts in Malaysia.

The contracts, the company said in a statement, had no specific values as the jobs are on a “call-out” basis whereby the work orders will be awarded at the discretion of the clients based on its activities schedules and rates throughout the duration of the contracts.

“We are appreciative of the continued confidence and support received from our business partner as evidenced by the award of these contracts to the company,” group managing director and chief executive officer Datuk Mohd Abdul Karim Abdullah said.

“We are notably proud to have secured an operation and maintenance project in Uzbekistan for the first time, which further strengthen our footprint in central Asia,” he added. The new contracts lifted Serba Dinamik order book to RM7.5bil. Affin Hwang Capital said it was bullish on the company’s contract wins.

“We are positive as Serba Dinamik continues to showcase its strong capability in penetrating new regions and securing the new onshore maintenance, construction and modification work scope. We make no changes to our earnings forecasts as these contracts fall under our 2019 replenishment target of RM3bil,” the research house said.