KUALA LUMPUR (March 26): Oil and gas (O&G) services firm Keyfield International Bhd, which primarily charters accommodation vessels, plans to acquire new vessels to ride on growing demand from local oil and gas firms, subsequent to its initial public offering (IPO) that would raise up to RM188.06 million.
Group chief executive officer Datuk Darren Kee said the company aims to strengthen its market share through the expansion of its fleet, in addition to broadening its service offerings, which include the chartering of anchor handling tug and supply vessels.
Keyfield International has already acquired a vessel earlier this year, he told the press, adding that it is still eyeing two more vessels to meet the growing demand from local firms.
Keyfield International currently possesses eleven vessels and has witnessed steady increase in utilisation rate since 2021. For 9MFY2023, the company registered a utilisation rate of 82%, as compared to 62.4% in the previous year’s corresponding period.
Its own vessels contributed 67.5% of its RM310.92 million total revenue during the same period, while third-party vessels contributed 32.5%.
“After we repay the various instruments used to buy the few vessels in the past [with the proceeds], we will be in a good position to generate cash from our order book and we intend to use part of that to potentially look at the new vessels,” chief financial officer Eugene Kang told the press after the prospectus launch.
The company saw an estimated market share of 23.7% for FY2023, based on the total number of days per annum Malaysian-flagged accommodation work boats were chartered. In comparison, the company saw a market share of 20.1% in FY2022 and 16.2% in FY2021.
On the financial front, it posted a net profit of RM83.35 million or 10.4 sen per share for 9MFY2023, more than double the RM36.05 million or 4.5 sen per share logged in the previous year’s corresponding period. This translates to a price-to-earnings ratio of 8.7 times based on the IPO price of 90 sen per share.
The company reported an outstanding orderbook of RM662.6 million as at Feb 29, 2024, with the tenure of contracts ranging between several months and three years.
However, Kee said the biggest challenge for the group is to find suitable vessels at the right price, as it faces a shortage of suitable vessels that meet its tender requirements.
“We are very aware of the opportunities [in the industry]. At the same time, we are very careful about what we want to do in terms of fleet expansion. We don’t want to blindly buy good vessels at high prices just to fulfil our orders,” he told the press after the prospectus launch.
Furthermore, Kee noted that the group faces some resistance from banks in terms of financing to acquire vessels, partly due to the last round of downturn. He said the accommodation vessels from the company can still be used for other activities, even though it primarily serves the O&G sector.
Keyfield International’s IPO is priced at 90 sen apiece and consists entirely of new shares, according to its prospectus. The company allocated 40 million shares to the public, 24 million shares to eligible persons, and 144.96 million shares to Bumiputera and selected investors through private placement.
The existing shares are not for sale, Kang told The Edge at the sidelines, as the company remains confident in its growth potential.
Applications for the IPO will close on April 3 and listing has been scheduled for April 22.