KUALA LUMPUR: Maybank Investment Bank (Maybank IB) expects Velesto Energy Bhd to post its best quarterly performance in years in the fourth quarter of financial year 2023 (4Q23) on higher utilisation rate.
It expects the fourth quarter of 2023 utilisation rate to be high at 89 per cent (with all jackup rigs up and running; 3Q23: 62 per cent) and an average blended development cost rate (DCR) of USD97,500 (3Q23: USD97,000).
Maybank IB expects Velesto to post a core net profit of RM 25 million, barring any unforeseen cost swings.
This would make it the best quarterly profit since 3Q2023 of financial year 2019.
"Velesto may win some contracts soon as three of Velesto's rigs slated to complete or end their current jobs by early second quarter (Q2) of 2024 which is Vestigo (Naga 2), Petronas Carigali (Naga 4) and Hess (Naga 5)," the firm said.
Maybank IB has tweaked its financial year 2023-2025 net profit forecast estimates by -5 per cent/-10 per cent/+6 per cent based on the latest guidance provided by management with the group having four special periodical surveys scheduled for financial year 2024 estimate.
The firm believes it is reasonable to project 30 per cent dividend payout of profit after taxation and minority interest in FY25E, amounting to approximately 0.9 sen per share.
Maybank IB maintains its "Buy" call on Velesto with a higher target price of 34 sen.