New OceanMight projects provide earnings visibility
KUALA LUMPUR: Two contracts clinched by KKB Engineering Bhd’s (KKB) subsidiary, OceanMight Sdn Bhd, will provide earnings visibility to the group until financial year 2021 (FY21).
According to the team at MIDF Amanah Investment Bank Bhd (MIDF Research), the first contract awarded was from Petronas Carigali Sdn Bhd for the provision of engineering, procurement, construction, commissioning (EPCC) and installation of wellhead platform for BKD-A and Host Tie-In Modification at BNCPP-B Topsides - Bakau Non-Associated Gas Development Project.
The second contract was from PTTEP Sarawak Oil Ltd for the provision of EPCC works of Pemanis Satellite (PESA) Topside for PTTEP’s Sarawak SK309 Development.
The project execution period is 19 months for the contract from Carigali Sdn Bhd. Meanwhile, for PTTEP Sarawak Oil Ltd contract the scheduled completion is within 11 months.
“Moving forward, this project is expected to contribute positively towards the earnings and net assets of the group for the duration of the contract,” MIDF Research said in a note yesterday.
“We make no changes to our estimates as the total value of new jobs secured is within our contract replenishment expectation. We maintain our buy recommendation on KKB with an unchanged target price of RM1.52 per share.”