PETALING JAYA: Sealink International Bhd
is on track to return to profitability this year on improved fleet utilisation and blended daily charter rates (DCR).
According to Hong Leong Investment Bank (HLIB) Research, Sealink’s blended fleet utilisation is expected to rise to above 68% this year from about 60% in 2023. This is driven by robust offshore development and maintenance activities amid an acute shortage of Malaysian-flagged offshore support vessels (OSVs).
Meanwhile, Sealink’s fleet DCR has also improved drastically, with its 48-metre multi-purpose supply vessels (MPVs), for instance, now chartering at RM15,000 to RM20,000 per day, doubled from its trough few years ago, the brokerage noted.
“We expect Sealink to return to the black with core earnings of RM22.5mil in 2024, backed by a stronger blended utilisation rate at 68% and blended DCR of RM30,000 as well as the absence of lumpy one-off expenses that were incurred in 2023 (such as dry-docking costs and penalties),” HLIB Research said.
“Subsequently, we project further earnings growth of 31% in 2025, lifted by higher fleet utilisation at 75% and DCR of RM33,000,” it added.
HLIB Research ascribed a fair value of 52 sen for Sealink’s shares, based on 10 times mid-2025 earnings per share, a discount to 14 times price-earnings it typically ascribe to oil and gas services and equipment players.
“We view Sealink as a laggard in the OSV space due to its undemanding valuation amid an imminent earnings upcycle,” it said.
Sealink owns 19 active OSVs that are mainly chartered to the oil and gas industry, and it provides shipbuilding and repair services.
The group is aiming to secure a few vessels to be chartered under the production operations vessels (POV) programme. Nearly all vessels are currently chartered under spot rates, until the POV awards are officially concluded.
According to HLIB Research, Sealink is looking to secure a few vessels to be chartered under the POV programme, citing the company’s management.
“Nearly all vessels are currently chartered under spot rates, until the POV awards are officially concluded, likely in the second half of this year,” it said.
“Our checks indicated that the DCR under the POV tender will be similar to the current market spot rates, which we deem positive for the winners due to earnings security enhancement in the coming years,” it added.
To this end, Sealink had set aside a budget of around US$10mil to purchase one or two used anchor handling tug supply vessels, while looking to dispose of two vessels aged above 15 years, MIDF Research noted.
