KUALA LUMPUR (June 15): Crane builder Handal Resources Berhad is confident of its prospects in light of its RM277 million worth of tenders, and RM178 million order book amid an improving oil and gas (O&G) sector outlook.
Handal (fundamental: 1.4; valuation: 1.7) group managing director and chief executive officer Mallek Rizal Mohsin said the orderbook was targeted to last until 2017. Mallek said crude oil price recovery and the O&G sector’s improving outlook had provided the company with a lot of opportunities.
“The improving outlook in the O&G sector, aided by the recovering crude oil prices, presents a tremendous opportunity for support service providers such as Handal to expand our business. We have secured numerous contracts for crane fabrication from various international players since the fourth quarter of 2014, and are receiving work orders for crane maintenance as well.
“The fact that we now have two American Petroleum Institute-2C (API-2C) yards in Terengganu effectively increases our capacity to undertake more jobs for the O&G majors. We are working very hard to increase our orders in hand, and are tendering for RM277 million worth of contracts across various crane services,” said Mallek in a press statement today.
According to him, the group’s order book comprises crane fabrication contracts and maintenance work for the O&G sector.
Out of the RM178 million order book, a RM38 million portion was recently secured by the group’s wholly-owned subsidiary Handal Offshore Services Sdn Bhd.
Handal Offshore managed to secure contracts from SapuraKencana Petroleum Bhd, Sarawak Shell, Hyundai Heavy Industries, and MISC Bhd. Mallek said the cranes were slated for delivery this year.
He said the balance of the order book included crane maintenance contracts worth RM123 million, workover projects valued at RM9 million and downstream O&G services worth RM8 million.
At 12:30pm, Handal shares fell 0.5 sen or 1.4% to settle at 34.5 sen for a market capitalisation of RM55.2 million.
A total of 255,000 shares changed hands.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)