Earnings boost ahead for Dayang as order book exceeds expectations

KUCHING (Jan 16): Dayang Enterprise Holdings Berhad (Dayang) is poised for an earnings boost, driven by its larger-than-expected order book value of RM6.2 billion — exceeding analysts’ estimate of RM5.2 billion.

According to a research report by Philip Capital Sdn Bhd (Philip Capital), the company’s fourth quarter of 2024 (4Q24) earnings are expected to show stronger year-on-year (y-o-y) results driven by higher work orders, vessel utilisation rates, and improved charter rates.

Management has indicated no signs of a slowdown in work orders, despite concerns over potential capital expenditure cuts by Petroliam Nasional Berhad (Petronas).

“This could result in higher work order value and present upside risks to our earnings forecast, depending on clients’ work programmes.

“Dayang has been a key beneficiary of the latest Petronas’ Pan Malaysia maintenance, construction and modification (MCM) contract, accounting for 80 per cent of the current order book,” Philip Capital said in an analysis.

Philip Capital maintained that Dayang, as a Sarawak-based company, will be one of the primary beneficiaries under Petroleum Sarawak Berhad (Petros).

The demand for offshore vessels remains strong, supported by high utilisation rates across both Dayang and its subsidiary Perdana Petroleum.

“Management anticipates a 4 to 5 per cent increase in charter rates, driven by the ongoing vessel supply shortage, which will further strengthen margins,” it noted.

The report further pointed out that vessel utilisation in 4Q24 is projected to surpass the 58 per cent recorded in 4Q23.

This increase is attributed to the need to complete work orders before the expiration of the previous hook-up and commissioning (HUC)/MCM contract in December 2024.

“With the recent contract wins driving a record-high order book, we remain positive on the 2025 earnings outlook,” it said.

-Agency