Strong order book for SapuraKencana
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Strong order book for SapuraKencana
Strong order book for SapuraKencana |
Business & Markets 2013 |
Written by MIDF Research |
Tuesday, 29 October 2013 10:26 |
(Oct 28, RM4.17)
Maintain buy with a target price of RM4.86: SapuraKencana has won a contract for the provision of subsea inspection services for Carigali-Hess Facilities from Carigali-Hess Operating Co Sdn Bhd. The contract was awarded to SapuraKencana’s wholly owned unit, Allied Marine and Equipment Sdn Bhd. The contract value is approximately RM62 million for a duration of four years based on a call-out basis.
The contract includes the inspection of Carigali Hess jackets, pipelines and floating, storage and offloading vessel (FSO).
The company will also provide diving equipment, remotely operated vehicle (ROV), support vessel, personnel and inspecting/recording equipment as well as tools and spares required to perform the services and other work.
Carigali-Hess is engaged in gas production in Block A-18 of the joint development area administered by the Malaysian-Thailand Joint Authority. The block is located 150km from Kota Baru in 60m of water.
SapuraKencana’s order book remains strong at US$7.7 billion (RM24.17 billion). Broken down geographically, 51% of the jobs are from Brazil, 24% from Malaysia, 17% from Southeast Asia, 5% from Australia and the remaining from other locations.
Business segment-wise, 58% of the jobs are from the offshore construction support services (OCSS) segment, 10% from fabrication and hook-up and commissioning (HUC) and the rest from drilling and energy services (DES).
Tender book value is almost similar to that of the current order book.
Moving forward, SapuraKencana will focus more on the DES and OCSS segments where margins are significantly higher and more value-added activities can be undertaken. In addition, the group is also looking at at least two more risk service contracts from Petroliam Nasional Bhd. Channel checks indicate that the awards are likely to be announced in the first quarter of calendar year 2014. — MIDF Research, Oct 28
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This article first appeared in The Edge Financial Daily, on October 29, 2013.
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