Keyfield sees improvement in financial position
ing capital and listing-related expenses,” he adds.
POST-IPO, Keyfield anticipates improvement in its financial position, with its projected gearing ratio dropping from 1.3 times to 0.14 times, alongside a reduction in borrowings to Rm69.5mil from Rm333mil.
Additionally, Kee shares the company’s plans for growth, noting its intention to acquire two additional vessels, having already acquired one in January.
“After we repay the various instruments used to buy the few vessels in the past, we will be in a good position to generate cash from our order book and we intend to use part of that to potentially look at the new vessels,” Kee says.
Currently owning 11 Malaysian-flagged vessels, with capacities ranging from 50 to 500 persons, Keyfield has plans to solidify its position as a key player in the offshore accommodation sector.
Citing independent market researcher Providence Strategic Partners Sdn Bhd, Kee notes Keyfield’s market dominance, with a market share of about 23% based on the total number of days a year that Malaysianflagged accommodation work boats were chartered.
Kee says, presently, all the group’s vessels are fully chartered, working in various locations in Malaysia.
“We have jump-started our expansion programme even way before the IPO, buying quite a few vessels,” he says.
He adds that the group has acquired these vessels when the prices are substantially lower due to the subdued O&G sector, but he was tight-lipped about the exact numbers.
Recognising financing challenges
Additionally, Kee points out the challenges posed by banks’ cautious approach to vessel financing.
“At that point in time, and as we speak now, banks are still quite not receptive to vessel financing. So, we have to rely on various ways of acquiring vessels, one of them is through issuance of CRNCPS,” he says.
When questioned about banks’ concerns, Kee reflects on the volatile O&G industry between 2009 and 2012, where soaring oil prices led to an influx of financial providers.
However, the subsequent crash in oil prices in 2016 to around US$20 per barrel significantly impacted O&G players, which in turn affected banks’ loan recovery.
“So I think because of that banks have been rather careful about financing vessels,” he says.
Despite these challenges, the group successfully secured loans from RHB Bank and Bank Pembangunan in 2020 for vessel acquisitions, which were fully settled by 2023.
“That is a testimonial of our ability to generate cash to pay all these debts,” he says.
Furthermore, Kee regards vessels as commodities, acknowledging their fluctuating prices based on demand.
“Sometimes, vessel prices can surge, especially when demand is high and people are eager to acquire them,” he says.
Hence, he says the group will remain vigilant in its approach to vessel acquisitions, leveraging market dynamics to its advantage.
Utilisation rate
Commenting on its utilisation rate, Kee says different vessels have different rates.
However, cumulatively Key says the group’s fleet has a utilisation rate of about 82% as at the end of September 2023.
In the Malaysia context, he says the monsoon season, typically lasting from the end of November to February, causes choppy and harsh waters.
This prompts oil majors to hold back work during these times.
In light of this, Kee says utilisation during the first quarter is usually relatively lower compared to other quarters.
However, Kee says the group has vessels that are utilised year-round, achieving 100% utilisation.
This is made possible by the group’s vessels that are equipped with dynamic positioning class 2 (DP-2) systems, a computer-controlled system used to automatically maintain a vessel’s heading and position without the use of mooring lines or anchors.
Comparatively, the conventional method involves four-point mooring, which drops four anchors to withstand water pressure and moves during choppy water, which still has its market demand.