KUALA LUMPUR: Perdana Petroleum Bhd's contract wins provides earnings visibility for Dayang Enterprise Holdings Bhd in the upcoming quarters.
RHB Research said in a note that Perdana Petroleum's marine segment is likely to deliver stable earnings growth, backed by better utilisation and higher daily vessel charter rates.
Dayang's 64 per cent-owned Perdana Petroleum announced that it had won five contract awards namely four contract extensions and one new contract granted by Petronas Carigali.
The total duration of the contracts ranges from 140 days to 271 days, effective either from November 2023 or January this year.
The contracts' value ranges from RM8.3 million to RM19.8 million.
"We are positive on these contract awards as they ensure earnings visibility for the coming quarters. We were guided that the implied daily charter rates of RM33,000 to RM72,000 point to a mild improvement from that of previous contracts.
"We think that these rates are still lower than that of current spot charters which generally pencil in slightly shorter timeframes.
"Management still sees potential improvement in daily charter rates this year due to tight vessel supply," it said.
Perdana Petroleum's outstanding orderbook stood at RM250 million as of December 2023.
Meanwhile, 14 out of its 15 vessels have secured contracts that last one to nine months. As of Feb 22, 10 vessels were on hire and 14 vessels will be on hire.
"Perdana Petroleum expects to achieve a 65-70 per cent vessel utilisation rate in FY24 and is targeting to lock in some long-term contracts to ensure long-term earnings visibility," said the firm.
RHB Research maintained its "Buy" call on Dayang Enterprise with an unchanged target price of RM2.95.