KUALA LUMPUR (Aug 16): Shares in Keyfield International Bhd (KL:KEYFIELD) continued to chart new record highs since their listing barely four months ago, as investors cheered another strong quarter for the oil and gas services firm.
Keyfield rose as much as 20 sen or 7.5% to RM2.90 on Friday morning. The stock was trading at RM2.83 at 9.45am, giving the company a market capitalisation of RM2.27 billion on Bursa Malaysia. Trading volume totalled 2.38 million shares so far, slightly above the 20-day moving average.
Keyfield is currently in the peak season of the offshore support vessel market (in the second and third quarters of the year), and “we expect vessel utilisation to remain strong”, said Kenanga Investment Bank, the sole research house covering the stock.
The latest results were better than expected, Kenanga noted, raising its earnings forecasts by 26% for the financial year ending Dec 31, 2024 (FY2024) and 4% for FY2025. The house also raised its target price to RM3.18 from RM3.06 previously, and maintained its ‘outperform’ call.
Shares in Keyfield have already more than tripled in prices since their listing in April, making the stock one of the best performers on Bursa, as rising activity in the oil and gas sector boosted demand for the company's services. Brent, the benchmark for crude oil, is still elevated and hovering near US$80 (RM355.86) per barrel.
Keyfield generates the most revenue in the second and third quarters of the year, and its ships are typically busiest during the period. The first and final quarters are affected by monsoon conditions that bring strong winds, choppy seas, and heavy rainfall in the South China Sea, where its vessels operate.
Net profit for the second quarter ended June 30, 2024 (2QFY2024) was RM70.04 million, compared with RM30.16 million a year earlier. The company would have booked a net profit of RM77.1 million after adding back non-cash share option expenses and one-off listing expenses and accretion of interest on preference shares.
For the first half ended June 30, 2024 (1HFY2024), net profit jumped to RM100.34 million from RM37.57 million for 1HFY2023. Net profit would have been at RM108.3 million after deducting the extraordinary items.
Kenanga estimated that daily charter rates improved by 20% year-on-year in the second quarter, and “will continue to trend upwards in the local market, as supply remains tight while client demand continues to increase”.
The company took delivery of Keyfield Itqan in July, and the vessel is currently being prepared for deployment, while Keyfield Aulia was also added to the company’s fleet earlier this month.
The vessels are expected to contribute to income from 4QFY2024, further driving earnings growth, Kenanga added.