KUCHING: Dayang Enterprise Holdings Bhd group is continuously bidding for new contracts by the oil majors.
The group is expecting to secure additional contracts given its outstanding track record and financial position, said Dayang group managing director Tengku Dato Yusof Tengku Ahmad Shahruddin.
For 2022, he said the group is cautiously optimistic that the outlook would be stronger with improving economic activities, stable crude oil price and lifting of travel restrictions throughout the country by the government and stepped up vaccination for COVID-19.
“Our operations will be busy with substantial new and carried over from 2021 work orders. We are expecting our clients to initiate extensive capital expenditure to increase their productivity with emphasis on maintenance activities,” he added in the company’s newly released 2021 annual report.
Reviewing the group’s 2021 performance, Tengku Yusof said at the beginning of last year, the group had received significant work orders from its clients that could signal its come back especially at the back of a stable and improved crude oil prices.
However, he said as high COVID-19 infection rate at the end of second quarter caused another enforcement of the movement control order (MCO) by the government, this had resulted in the group’s inability to mobilise its crew for offshore execution, leading to the halting of some offshore activities that were supposed to be implemented.
The matter got worse when the state governments implemented enhanced standard operating procedures (SOP) to contain the infection, he pointed out.
“Despite the challenges in 2021, the group together with its clients and suppliers were able to continue its activities to complete some works through implementation of various measures.
“It is worth to note that during the year under review, the group successfully fabricated and installed a 50-metre inter-platform bridge weighing 130MT at Baram Oil Field with 66,206 man-hours without lost time injury which was a new milestone for the group,” said Tengku Yusof.
In 2021, he said the group’s topside maintenance division had performed well, recording a revenue of RM419.5 million (2020:RM521 million),representing 62.83 per cent of group revenue.
The hook-up and commissioning division reported a growth from 7.52 per cent of group revenue in 2020 to 21.38 per cent in 2021.
However, for the marine division, the vessel utilisation rate fell to 44 per cent from 53 per cent in 2020 mainly due to stop-work orders issued by clients due to COVID-19 infections at work vessels.
Dayang executive chairman Datuk Hasmi Hasnan said for FY2021,the group registered lower revenue of RM667.7 million (FY2020:RM731.4 million) and its overall profitability was significantly affected by its vessel-chartering subsidiary — Perdana Petroleum Bhd (PPB) — due to lower vessel utilisation rate.
“PPB also changed its accounting policy on the useful lives of 8 anchor handling tug services (AHTS) from 25 years to 15 years and undertook a mark-to-market exercise to determine the value of these assets. As a result, the group recorded a one-off depreciation charge of RM41.3 million and impairment charges of RM349.8 million on property, plant and equipment, and goodwill,” he added.
Hasmi said despite the adverse operating environment, the group generated RM160.8 million of operating cash flow in 2021,with a net cash position of RM339.7 million.
The group paid out RM17.37 million based on dividend per share of 1.5sen to shareholders in FY2021.
“The group remained on a strong footing fundamentally, both financially and operationally, enabling us to pursue new growth opportunities.
“The group will continuously strive to improve its profitability and remain as a cost-efficient service provider for the industry, without compromising on health and safety standards. We will also monitor closely the current operating environment, with greater emphasis on capital preservation, cash flow management and cost containment,” he added.
