Quick take: Icon Offshore shares lifted by PAC, Petronas Carigali contracts

KUALA LUMPUR: Icon Offshore Bhd shares rose 4.3% in early trade Monday in response to a series of contracts and a work order to provide vessels.

The counter, of of the most active, gained 4.35%, or 0.5 sen to 12 sen with 11.16 million shares traded.

Icon Offshore’s subsidiary secured a series of contracts and a work order to provide vessels to three petroleum arrangement contractors (PACs) and Petronas Carigali Sdn Bhd.

The company said its wholly owned unit Icon Offshore Group Sdn Bhd received five contracts for the provision of offshore support vessels (OSV) from three PACs for production operations and a work order for the provision of a straight supply vessel from Petronas Carigali.

The contracts are on a call-out basis for a period of three years with an option to extend for one year plus one year.

It also said Petronas Carigali had awarded the Icon unit a work order for the provision of a straight supply vessel.

The contract, valued at about RM8mil, is for the Tanjung Pinang 2 vessel for a tenure of 180 days with an option to extend for another 180 days.

Maybank Investment Bank Research is retaining its sell call on Icon Offshore with an unchanged target price versus its last traded price of 12 sen based on 0.9 times enterprise value/ replacement value.

The research house said on Monday while the improvement in its offshore vessels (OSV) utilisation this year is a given, the need to resolve its financial predicament is Icon’s key priority (net gearing level of 727% as at December 2018), which is set to be unveiled in 3Q19.

“Also, daily charter rate (DCR), which is at its historical trough now, needs to rise to warrant a re-rating,” it said.

Source : TheStar