Analysis: Velesto Energy sees ESG score of 44 out of 100
KUCHING: Maybank Investment Bank Bhd (Maybank Research) assessed Velesto Energy Berhad’s (Velesto Energy) overall environmental, social and governance (ESG) score of 44 (out of 100), making its ESG rating slightly below average, in its view.
“We think that more can be done in relation to its policies, commitment and targets towards its sustainability goals to improve investor perception of its ESG efforts,” the research firm said in its analysis.
“We highlight a significant improvement in the group’s: green house gas intensity (Scope 1 & 2) and disclosures on Scope 3 emissions.
“Also, the group follows the Task Force on Climate-Related Financial Disclosures (TCFD) framework for ESG reporting.”
There are ESG policies in place and it is under a risk committee that is led by its Board of Directors.
Maybank Research also applaud that Velesto Energy has a few carbon mitigation/ water/waste management strategies in place to reduce its waste and carbon emissions.
“While Velesto has some decent targets such as net carbon neutrality by 2050; a qualitative statement that the group plans to reduce emission intensity, we think that more can be made in terms of its ESG targets in the medium term in regards to waste/ water management and a more gender equal workforce,” it said.
“On the assumptions of higher overall blended jackup rig discounted cash rates forecast of US$114,000 in FY24; and a marginally higher average jack-up rig utilisation rate of 83 per cent in FY24, coupled with operating leverage, we expect FY24 net profit to be almost three times FY23.
“We make no changes to our FY23-FY25 earnings, buy call and target per cent of RM0.30. Velesto Energy is our sector’s top buy pick.”