Latest news with #OSVs
The Star
4 days ago
- Business
- The Star
Coastal well positioned to deliver long-term value
PETALING JAYA: Coastal Contracts Bhd is well positioned to deliver long-term value, backed by its strong cash reserves and a growing presence in shipbuilding and energy infrastructure. While short-term earnings for the integrated oil and gas services and energy infrastructure solutions provider are being weighed down by timing-related factors, the group's medium-term prospects remain intact. The group's robust financial footing stems from major contributions from its Mexican joint venture Coastoil Dynamic SA De CV (Cody), and proceeds from the sale of two offshore support vessels (OSVs). As a result, Coastal now holds approximately RM1bil in cash and cash equivalents, the majority of which is currently placed in short-term investments such as money market funds, said TA Research. This liquidity, the research house noted, 'provides room to pursue key growth initiatives'. Coastal's shipbuilding division is expected to drive earnings recovery, TA Research said. Three utility support vessels are currently under construction, with two scheduled for delivery in the second half of this financial year (2H25), and one in 1H26. The company also has three high-end OSVs in the pipeline, with staggered deliveries planned from 1H26 through 1H27. Beyond its core business, Coastal is exploring diversification into high-end hospitality, which would further boost its prospects. TA Research noted that the group is in discussions with luxury hotel operators to manage a resort development on Pulau Mabul. 'The capital expenditure for the first phase is estimated to be RM85mil and the room rate is expected to be more than US$500 per person per night,' the research house said. Given the project's timeline of one to two years and the fact that discussions are still ongoing, TA Research said it does not expect the hospitality segment to generate revenue until 2026. Meanwhile, Coastal's near-term financial results reflect a lull in project deliveries. For the first quarter ended March 31, the group reported core profit of RM17.7mil, which TA Research said was within its expectations at 22% of its full-year forecast, though it missed consensus forecasts at 15%. 'We anticipate earnings to grow from the shipbuilding division with two utility support vessels scheduled for delivery in 2H25,' the research house said. Quarter-on-quarter, revenue fell 58.2% to RM16.5mil, due to weaker contributions from shipbuilding and ship repair, while pre-tax profit dropped by 84.9%. Year-on-year, revenue declined by 7.1%, with pre-tax profit plunging 83.3% due to the absence of charter income from an OSV. TA Research maintained its 'buy' recommendation on Coastal with a target price of RM2.04 per share, based on a sum-of-parts valuation.
Borneo Post
09-05-2025
- Business
- Borneo Post
Perdana Petroleum targets Sarawak expansion, eyes OSV fleet renewal in 2025
Abd Hapiz says the move includes listing its operating subsidiary's registered address at the Miri office, in compliance with new state regulations. – Photo from Perdana Petroleum KUCHING (May 9): Perdana Petroleum Berhad (Perdana Petroleum) is expanding its presence in East Malaysia with plans already underway following the opening of its branch office in Miri in January 2024. Chairman Datuk Dr Abd Hapiz Abdullah said the move includes listing its operating subsidiary's registered address at the Miri office, in compliance with new state regulations. He added that the company aims to create more job opportunities for Sarawakians. 'These efforts will raise Perdana's visibility and influence in Sarawak, attracting more business for the Group,' he said in the company's 2024 annual report. He said the company remains optimistic about its 2025 outlook, supported by strong demand for offshore support vessels (OSVs) for production and maintenance operations, as projected in the Petronas Activity Outlook 2025 to 2027. 'However, we will exercise caution and manage our business prudently through continuous operational efficiency, cost management enhancements, and vessel deployment optimisation,' he added. In line with its sustainability goals, Perdana is open to potential business ventures or mergers and acquisitions as it pursues its next phase of growth. 'We are confident that our fortitude and tenacity in navigating past storms will serve to establish the Group as a leading OSV owner-operator in the region,' he said. A key focus in 2025 will be the group's long-awaited fleet renewal scheme. It has begun replacing ageing anchor handling tug supply (AHTS) vessels to comply with a local oil major's 20-year age cap on OSVs. 'This is part of our goal to build a sustainable and high-performance fleet that will enhance Perdana's competitiveness,' he said. He also noted a positive outlook for the oil and gas (O&G) exploration and production sector, with a growing trend towards awarding longer-term contracts to vessel operators. He said this would help Perdana secure bank financing for newbuild vessels. Cost-effective fleet renewal options such as acquiring younger, second-hand vessels are also being explored, he added. To recap, Perdana Petroleum posted a record revenue of RM440.1 million for the financial year ended December 31, 2024, a 40 per cent increase from 2023. Profit after tax (PAT) rose more than threefold to RM146.1 million, which was the highest in 17 years. Its group vessel utilisation rose to 70 per cent, the highest since 2019, driven by strong O&G activity and higher daily charter rates (DCR). Accommodation work barges (AWBs) led fleet utilisation at 81 per cent, followed by AHTS vessels at 68 per cent and workboats (WBs) at 52 per cent. Meanwhile, quarterly utilisation rates ranged from 60 to 90 per cent in the first three quarters. The drop in 4Q to 50 per cent was due to AWBs and WBs being placed off-hire during the monsoon season and two AHTS vessels undergoing dry-docking. The group did not declare any dividend for FY24, stating that 'it has just turned profitable over the past three financial years, and dividend distribution will be considered once a stable and sustainable profit trend is firmly established.' east malaysia Expansion miri Perdana Petroleum
