Icon’s OSV utilisation to improve in Q3

According to sources, the proponents of the deal are unsure if shareholders

KUALA LUMPUR: Despite the soft offshore support vehicles (OSV) market, Icon Offshore Bhd’s  average OSV utilisation is set to improve in the third quarter (Q3) of this year. 

Maybank IB Research said on Wednesday the company in a recent briefing expects its average OSV utilisation to improve quarter-on-quarter (q-o-q) in Q3 16 (Q2 utilisation: 54%). 

Its warmed stacked vessels would fall to five units in Q3 versus six units in Q2 as its OSV, Tanjung Pinang 3, is chartered out on a short-term basis, it added. 

The research house, while maintaining its earnings forecasts and target price of 42 sen, said the improved OSV utilisation would be partly negated by further weakness in daily charter rates (DCRs). 

Based on recent transactions, the daily OSV DCRs in Malaysia are trending at lower US$0.90-US$1.00 per brake horsepower (bhp) versus US$1.00-1.20 per bhp previously.  

While the overall demand for OSVs remain soft, Maybank IB sees sporadic strength in certain segments. 

“The tender pipeline for accommodation workboats (AWBs) is strong. There are about six tenders in the market for Q4 charters. Icon confirmed that it would take delivery of its AWB new build, Aliza, three months ahead of its Q1 17 schedule. Apart from Aliza, its three remaining new vessels (2 x 10k bhp AHTS and 1 x PSV) will remain in the respective shipyards until there are firm charters for them,’’ it noted. 

The company has also succeeded in rescheduling some of its loans, deferring their principal repayment of RM63mil by three years to 2019 which is positive towards easing its cashflows in this cyclical downturn,’’ he research house added.