Wasco Bhd managing director/group chief executive officer Giancarlo Maccagno
PETALING JAYA: Wasco Bhd
anticipates stronger contract wins in the coming quarters as it expects deferred project awards to materialise by the fourth quarter of 2024 (4Q24) or early 2025.
The company, which has an outstanding order book of RM3bil as of Sept 30, 2024, also saw its tender book grow significantly to RM9.6bil from RM7bil in the previous quarter.For 3Q24, Wasco delivered earnings that exceeded analysts’ expectations, driven by stronger margins across its key segments.
Despite an 18% decline in its order book quarter-on-quarter due to project completions and foreign exchange impacts, the company remains optimistic about replenishment momentum as several large-scale tenders are finalised.
According to Hong Leong Investment Bank (HLIB) Research, the higher tender book reflects robust activity in the oil and gas sector globally, particularly in floating production storage and offloading and liquefied natural gas projects.
“We view that its order book level should comfortably sustain above RM3bil in the coming years,” said HLIB Research, which maintained a “buy” rating with a higher target price (TP) of RM2.41 per share on Wasco.
Kenanga Research noted that Wasco is actively tendering for RM9bil worth of projects, split evenly between oil and gas and bioenergy.
“With an order book valued at RM3bil, the company anticipates an increase in work orders and its order book to grow materially in the end of its financial year ending Dec 31, 2024 (FY24) or early-2025 as the tenders finalise,” it noted. Kenanga Research said major projects, such as the Yinson Agogo and North Field Expansion, are nearing completion at 98% and 92%, respectively.
It said Wasco’s Kasawari CO2 Sequestration project is in the early stages, with 15% progress, and the Middle East substation project is at 1%, slated for completion by mid-2026.
Kenanga Research, which maintained an “outperform” call on the stock, raised its FY24 and FY25 earnings forecast by 11% and 7%, respectively, and increased its TP to RM1.83 a share.
