This represents the fifth round of contracts award and could be the last one for this year with collectively 25 contracts worth RM11.5 billion for Serba Dinamik.
KUCHING: Analysts laud Serba DInamik Holdings Bhd (Serba Dinamik) for securing another six operation & maintenance (O&M) contracts, one engineering, procurement, construction and commissioning (EPCC) contract and two information, communication and technology (ICT) jobs from Malaysia, Indonesia, the UAE and Guinea.
The overseas jobs include building a 4.8MW biogas renewable energy power plant at Aceh Tamiang in Indonesia, providing maintenance services for microturbine generators in Indonesia, Indonesia-based virtual technology demo room rental services and plant maintenance services in the UAE, as well as implementing telecommunications and ICT infrastructure in Guinea.
The combined contracts with specific values from overseas reach RM466 million while the O&M jobs in Malaysia are on a call-out basis which will be awarded at the clients’ discretion.
These domestic O&M jobs were awarded by PTTEP, Sarawak Shell, JX Nippon Oil & Gas Exploration and BASF Petronas Chemicals.
The team at Public Investment Bank Bhd (PublicInvest Research) noted that this represents the fifth round of contracts award and could be the last one for this year with collectively 25 contracts worth RM11.5 billion for Serba Dinamik.
“With these new wins, Serba’s outstanding order book is at a historical high of RM18.7 billionn, translating to 4.1 times of revenue,” it cited in its report today.
“Management’s target of an RM15 billion balance orderbook at the end of 2020 appears to have been accomplished. We foresee the momentum to continue towards 2021 in line with progressive improvement in oil and gas industry.
“The needs to replenish orderbook is important for Serba in order to utilize the Teluk Ramunia yard though we believe that won’t be an issue given Serba’s strong presence and track record globally.”
Given Serba’s quarterly order book depletion of RM1.5 billion, AmInvestment Bank Bhd (AmInvestment Bank) expect its outstanding order book at RM18.5 billion as of the third quarter of 2020 (3Q20) to decline by five per cent to RM18 billion in 4Q20 unless as the group manages to secure additional contracts by then.
“Nevertheless, we would not be surprised by additional contracts soon as Serba aims to lease parts of the facilities to third parties,” it said in its own notes.
“Serba Dinamik would also be angling for fresh jobs in decommissioning, petrochemicals and renewable sectors following the recent conclusion of the purchase of the RM320 million Teluk Ramunia yard from Petronas.
“As such, we are not unduly worried about the overall slowdown in the sector’s order awards as Serba’s outstanding book had already exceeded its FY20F year-end target of RM15 billion since 1Q20.”
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