KUALA LUMPUR (Aug 24): Dayang Enterprise Holdings Bhd marked a return to profitability after notching a net profit of RM64.69 million in the second quarter ended June 30, 2023 (2QFY2023), its highest quarterly profit since its 4QFY2019 result of RM78.23 million.

In a year-on-year (y-o-y) comparison, the integrated oil and gas (O&G) service provider’s latest quarterly net profit represents a 54% jump from RM42.02 million, which it credited to higher utilisation rates for vessels with better margin.

Dayang Enterprise said net profit rose despite a net realised or unrealised foreign exchange (forex) loss of RM18.7 million in the current quarter versus a net realised or unrealised forex loss of RM4.7 million a year ago.

Correspondingly, earnings per share increased to 5.59 sen from the previous 3.63 sen, it reported in a Bursa Malaysia filing on Thursday (Aug 24).

Revenue also rose 16% y-o-y to RM305.73 million in 2QFY2023 from RM263.41 million, it said.

“Vessel utilisation during the current quarter has improved from 66% to 72%, as compared to 2QFY2022,” Dayang Enterprise said.

Besides the higher capacity utilisation of vessels with improved daily charter rates, the group said it bagged more work orders or contracts from oil majors under topside maintenance contracts.

It did not declare any dividend for 2QFY2023.

Dayang Enterprise’s net profit and revenue for the cumulative six-month period ended June 30, 2023 (1HFY2023) was still below 2HFY2022, which it attributed to unfavourable oil prices in early 2023 as well as the forex loss.

Net profit for the period-to-date stood at RM48.75 million, a 13% decrease from RM55.78 million, while revenue fell slightly by 1% to RM418.15 million from RM423.55 million.

In terms of prospects, Dayang Enterprise said the positive performance of 2QFY2023 may be sustained in the remaining quarters of 2023.

“The earnings visibility remained fair given that quite a few ongoing contracts have been extended until FY2024. In addition, the contract extensions were given with a moderate revision in unit rates to cover a substantial surge in operating cost, especially raw materials and logistics.

“At present, we anticipate similar call for work orders from our clients to better maintain their production capabilities with an outstanding estimated call-out contracts of about RM1.19 billion.

“We will however remain prudent in managing our business affairs while continuing to deliver outstanding performance,” it said.

On Thursday, Dayang Enterprise's share price closed six sen or 3.97% higher to RM1.57 — the highest since its closing price of RM2.08 on March 6, 2020 — valuing the group at RM1.82 billion.