• The project is expected to be completed by 30 April 2017.

• The work scope includes surveys, designs, engineering, procurement, fabrication, transport and installation, hook-up, and commissioning works.

• These contracts win will expand orderbook from RM26bn to RM27bn (circa 2.7x FY01/15 revenue).

• This will be part of and in line with our assumption on orderbook replenishment. We have factored in RM3.2bn contract replenishment in FY16 for FHC and OCSS division (YTD win is circa RM2bn).

Pros/Cons

• We are positive on the contract awards as this will provides solid earning visibility despite weak oil price environment. Current orderbook stand at RM27bn and in term of earnings visibility, circa 80% of our FY16’s forecast  as already been secured.

• Negotiation on gas sales agreement on SK310 field remains on track and expected to commence development in  2H15 with 1st gas in 2017.

Risks

• Execution risk,

• Prolong low oil price,

• Delay in contract award.

Forecasts

• Unchanged as this will be part of our assumption for orderbook replenishment.

Rating - BUY

Positives

• Strong balance sheet and knowhow and global trend towards offshore production.

Negatives

• Increased competition for growth markets, complexities of running a larger organization and lower oil price.

Valuation

• Maintained BUY call with an unchanged TP of RM2.85 based on unchanged 14x CY16 EPS of 20.4 sen/share.