This article first appeared in The Edge Financial Daily on December 22, 2017

KUALA LUMPUR: Shares in Perdana Petroleum Bhd yesterday extended their downslide yesterday amid expectations that the group will report a massive loss for 2017.

The counter fell as much as 16.67% in active trade before parring some of the losses to close the day 13.89% or five sen lower at 31 sen, with some 36.88 million shares traded.

Since it resumed trading on Monday after a two-year suspension, Perdana Petroleum has lost about RM272.46 million in market capitalisation. As of yesterday, its market capitalisation stood at RM241.33 million.

The stock hit limit-down on both Monday and Tuesday, after which the trading of its shares was halted temporarily on Wednesday. It fell to 66 sen on Monday compared with its pre-suspension price of RM1.54, and slumped further to 36 sen on Tuesday.

MIDF Amanah Investment Bank Bhd Research analyst Aaron Tan told The Edge Financial Daily that the fall in the share price was because the market expectation is that the group is due to make massive losses for 2017, its third loss-making year in a row since 2015.

However, he added that Perdana Petroleum could possibly stage a turnaround in 2018 due to the positive outlook on offshore activities as pointed out in the Petronas Activity Outlook 2018-2020.

“Perdana Petroleum’s vessel utilisation rate is expected to hit more than 70% next year, owing to a maintenance, construction and modification services contract won by Dayang Enterprise Holdings Bhd from Petronas Carigali Sdn Bhd,” he said, noting that Dayang owns a 60.48% stake in Perdana Petroleum.

“Perdana Petroleum is reliant on Dayang, and with Dayang’s current order book worth about RM3.4 billion that could last them until 2022, I expect Perdana to post commendable earnings results in 2018, better than the loss made in the past three years,” he added.