SapuraKencana (SAKP) announced that the group has secured US$269m (RM969m) worth of international contracts for works in Mexico, Indonesia, Vietnam and India. The details are as below:

i.  Mexico’s  Pemex  had  awarded  to  SAKP  a  contract  to  install  the structures  and  superstructures  of  fixed  marine  platforms, pipelaying and lifting of major power generation equipment in the Bay of Campeche, Gulf of Mexico. The contract value is between US$41.2m and US$98.1m;

ii.  Indonesia’s  PT  PGAS  Solution  has  awarded  to  the  consortium comprising SAKP and PT Encona Inti Industri of Indonesia a contract  for  the  work  of  offshore  and  onshore  pipeline installation  in  the  construction  of  Kalija  1  Natural  Gas Transmission  Pipeline  of  Kepodang  –  Tambak  Lorok Segment.  The  work  will  be  performed  in  the  Muriah  PSC, Central  Java.  The  contract  value  is  a  lump  sum  fee  of US$97.5m;

iii.  PTSC  Offshore  Services  Joint  Stock  Company  had  awarded  to SAKP three contracts:

1.  A contract for the  installation of Nearshore and Offshore Pipeline  for  Thai  Binh  –  Ham  Rong  Gas  Distribution  & Gathering System Project, Phase  1 located in Offshore Thai Binh Province, North of Vietnam;

2.  A contract for the installation of offshore facilities for Thai Binh Development Project;

3.  A  contract  for  the  installation  of  the  H5-WHP  Topside and  Pipelines  for  Te  Giac  Trang  Field  Development Project offshore Vietnam;

iv.  BG  Exploration  and  Production  India  Limited  had  awarded  to SAKP a contract for the provision of transport and installation services  for  the  PB  Gas  Lift  Riser  Replacement  project  at Panna Offshore Field, offshore Mumbai. (Source: Bursa Malaysia)

Comments: The US$269m contract wins are good assurance that SAKP is capable  of  securing  international  works  despite  lower  global  oil  &  gas capex.  This  is  SAKP’s  first  announcement  on  a  major  contract  win  this year. We expect the group to secure more contracts in the coming quarters and  maintain  our  FY16  new  contract  wins  assumption  of  RM4bn.  No change to our earnings forecast, maintain HOLD.

Source: Affin Hwang Capital Research - 12 May 2015