KUCHING: Perdana Petroleum Bhd
is upbeat that the current buoyant demand for offshore support vessels (OSVs) in the oil and gas (O&G) industry, which has considerably driven up charter rates, will persist.
Managing director Jamalludin Obeng said the uptick in offshore activities in the O&G industry has boosted demand amidst the tight supply of OSVs.
“The tight supply of the OSV market is expected to continue to drive demand for the rest of the year, resulting in improved daily charter rates for OSVs,” he said, as Perdana Petroleum reported a sharp rise in the utilisation of its OSVs in the April-June 2024 quarter (2Q24).
Perdana Petroleum, which owns and operates a fleet of 15 OSVs, saw the utilisation rate of its OSVs lifted to 89% in 2Q24 from 69% in 2Q23. The 1Q24 vessel utilisation rate was much lower at 62%.
The group’s fleet comprises eight anchor handling tug supply (AHTS) vessels, five accommodation work barges and two accommodation workboats.
To alleviate the tight support of OSVs in the domestic market, Perdana Petroleum had since 2023 engaged additional third-party vessels from the South-East Asian region to supplement its fleet on-hire.
The existing tight supply of OSVs in Malaysia is due to underspending by vessel owners and no new-build orders for new assets in recent years.
This, according to Jamalludin, has created a supply-demand disparity for vessels that has driven up charter rates and sizeable market demand for the OSVs.
He said the high vessel utilisation rates and increased daily charter rates had bolstered Perdana Petroleum’s group after-tax profit in 2Q24 by RM26.1mil to RM34.7mil, from RM8.6mil in 2Q23 or a jump of 301%.
The higher earnings were in line with revenue expansion by 53% to RM124.6mil.
“The first half of 2024 (1H24) was characterised by the increase in offshore activities which translated into higher utilisation, amidst the tight supply of the OSV market.
“We are very pleased with the financial performance of Perdana Petroleum in 1H24 and are excited about the future.
“With Brent crude oil prices forecast to average US$86.4 per barrel in 2024, according to the US Energy Information Administration’s July 2024 Energy Outlook, the demand for OSVs is expected to remain firm,” added Jamalludin in a statement.
In 1H24, Perdana Petroleum’s group net profit climbed to about RM40.8mil as revenue doubled to RM223.8mil. The strong earnings of Perdana Petroleum, which is a 63.59%-owned subsidiary of Dayang Enterprise Holdings Bhd, has contributed significantly to Dayang’s bottom line.
In 2Q24, Dayang doubled its net profit to RM131.4mil as revenue shot up to RM455.8mil.
According to Dayang, the group’s vessel utilisation rates rose to 91% in 2Q24 from 72% in the corresponding period in 2023. In 1Q24, the utilisation rate was 48%.
“The shortage of OSVs for offshore production and operation activities continue to be the main reason for higher demand and improved daily charter rates for both own and third-party vessels.
“In addition, more work orders/contracts being awarded from oil majors received under topside maintenance contracts also contributed to higher revenue generated,” added the company.
In 1H24, Dayang group’s net profit surged to RM159.3mil from RM48.8mil in 1H23, as revenue soared to RM703mil from RM418.2mil.
Dayang said its 2Q24 performance reflected the robust activities in the maintenance, construction and modification (MCM) and hook-up and commissioning (HUC) projects, coupled with higher vessel utilisation rates.
“We are confident that we can sustain the similar performance in the third quarter, given the overall industry optimism supported by stable crude oil price.
“In financial year 2024, the earnings visibility will remain fairly strong with an outstanding estimated call-out contracts of about RM1.39bil.
“Moving forward, we continue to wait for the results of the new umbrella contracts for MCM and HUC,” the company added in explanatory notes to its financials.
Meanwhile, Petra Energy Bhd has also reported improved profitability, spurred by the higher utilisation of its OSVs.
In 2Q24, the group’s net profit rose to RM29.5mil despite a pullback in group revenue to RM162.6mil. The higher vessel utilisation rate drove the group’s marine assets segment revenue higher to RM132.8mil in 2Q24 and its pre-tax profit to RM27.7mil.
Petra Energy Group owns and operates three accommodation and work barges, four workboats, an AHTS vessel and one mobile offshore production unit.
In 2Q24, Petra Energy’s services segment also recorded a sharply higher pre-tax profit of RM17.9mil, although revenue had fallen to RM91.4mil. The higher earnings were attributed to product mix margins between the quarters.
In 1H24, the marine assets segment had doubled its pre-tax profit to RM25mil on revenue growth to RM192.3mil, thanks to higher vessel utilisation rates.
This boosted the group’s net profit in 1H24 to RM27.2mil.
Commenting on its prospects, Petra Energy said the outlook of the O&G industry remained positive, as evidenced by the favourable oil price level.
“Major oil producers continue to increase their capital expenditure in response to prolonged lack of investment in the past. This positive outlook augurs well for the group’s financial performance. It remains guarded and will continue to pursue other opportunities capitalising on its financial strength,” it added.
