Kenanga Research expects Keyfield to post strong 2Q24 and 3Q24 results.
PETALING JAYA: Keyfield International Bhd’s decision to buy two more accommodation work boats will help it grow its earnings, analysts forecast.
Kenanga Research said Keyfield’s move to buy a second-hand accommodation work boat (AWB) from Belait Barakah Sdn Bhd for RM28.3mil will contribute to earnings as early as financial year 2025 (FY25).
The second-hand dynamic positioning 2 (DP2) enabled AWB named MV Belait Barakah is currently idle and laid up in Miri, Sarawak.
Dynamic positioning is a computer-controlled system used in vessels to automatically maintain a vessel’s position and heading by using its own propellers and thrusters.
Keyfield is expected to spend an additional RM10mil to bring the vessel back to working condition within 90 to 120 days after the completion of the deal in the third quarter of this year (3Q24).
Keyfield has also put in an order to build a new DP2-capable AWB in China worth RM143.7mil.
The vessel is expected to be delivered in FY26.
“The total capital outlay of RM182mil will turn Keyfield from a net cash position of RM39mil as of end-1Q24 to net debt of RM143mil and gearing of 0.2 times, which are still highly manageable,” Kenanga Research said.
It expects Keyfield to post strong 2Q24 and 3Q24 results as all its vessels will be operating near full capacity after the monsoon season. The majority of Keyfield’s AWBs are currently engaged in medium-term charters of six to nine months.
“Should demand for AWBs remain robust, we project the group could secure higher daily charter rates for FY25.
Given the tight supply of offshore support vessels (OSV) in Malaysia on robust oil and activity, we expect charter rates to continue rising in coming months,” Kenanga Research said.
The research house raised its FY25 net profit forecast for Keyfield by 6% with the new developments and lifted its target price by 6% to RM2.85 a share from RM2.69 previously, pegged to an unchanged 11 times FY25 price-earnings (PE) multiple.
The PE is at a slight premium to the 10.2 times median OSV multiple due to Keyfield’s younger vessel fleet and higher fleet specifications.
Kenanga Research maintained its “outperform” call on the counter.
