Keyfield International Bhd CEO Datuk Darren Kee said the company has fully repaid its bank borrowings and they can leverage on their current debt-free balance sheet to further enhance returns to our shareholders while remaining vigilant and dedicated in managing their fleet and operations prudently. (Photo by Patrick Goh/The Edge)

KUALA LUMPUR (Aug 15): Oil and gas services firm Keyfield International Bhd (KL:KEYFIELD) more than doubled its net profit in the second quarter and flagged an industry upcycle amid tight supply of vessels servicing the industry.

The average daily charter rates were higher in the April-June quarter (2QFY2024) when compared to the same quarter last year, Keyfield said in an exchange filing. The company’s accommodation vessels were also busier with an increase in the number of chartered days and utilisation rate, Keyfield noted.

“Offshore oil and gas activities such as exploration, production, maintenance and decommissioning are expected to be maintained or increased,” Keyfield said. “Meanwhile, we expect supply conditions, particularly accommodation workboats, to remain tight in 2024 due to shortage of suitable vessels.”

Net profit for 2QFY2024 was RM70.04 million compared to RM30.16 million over the same period a year earlier. The company would have booked a net profit of RM77.1 million after adding back non-cash share option expenses and non-recurring listing expenses and accretion of interest on preference shares.

Revenue for the quarter surged 87% year-on-year to RM198.98 million from RM106.56 million. The number of chartered days for its own vessels in 2QFY2024 was 970 days with utilisation rate of 96.9% versus 2QFY2023’s 808 days and utilisation rate of 93.8%.

The number of chartered days for third-party ships surged to 733 days from 285 days in 2QFY2023.

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.

The company still has an order book totalling RM619.1 million consisting of contracted charters to-date, out of which RM337.5 million is for the remaining six months of 2024.

Keyfield’s fleet comprises 13 vessels, of which one was completed in July 2024 and is currently being prepared for chartering operations, and all 11 other vessels have been hired by clients.

For its first six months, net profit jumped to RM100.34 million from RM37.57 million in the first half of 2023. Net profit would have been at RM108.3 million after deducting extraordinary items. Cumulative revenue meanwhile surged 89% to RM305.37 million from RM161.97 million.

The company has fully repaid its bank borrowings and “we can leverage on our current debt-free balance sheet to further enhance returns to our shareholders while remaining vigilant and dedicated in managing our fleet and operations prudently,” said Keyfield chief executive officer Datuk Darren Kee.

Keyfield has declared a second interim dividend of three sen per share payable on September 13, 2024.

Shares of Keyfield closed unchanged at RM2.70 ahead of the results announcement on Thursday. The stock has tripled in price since its listing barely four months ago.