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Group managing director Huang Sha (pic)) said the outlook for the financial year ending Sept 30,2021 (FYE 2021) would be more challenging than previous years due to prevailing issues such as the ongoing Covid-19 pandemic and currency fluctuation

KUALA LUMPUR: Rubber hose manufacturer Wellcall Holdings Bhd will look into expanding its customer base to help the company weather through what is expected to be another challenging year ahead.

Group managing director Huang Sha (pic)) said the outlook for the financial year ending Sept 30,2021 (FYE 2021) would be more challenging than previous years due to prevailing issues such as the ongoing Covid-19 pandemic and currency fluctuation.

“Moving forward, the outlook and headwinds of the global economy remain challenging, particularly in the industrial rubber hose market. Nevertheless, the group’s strategies are to focus on leveraging its extensive customer network, productivity, quality service and product range to enhance its competitive edge.

“For the year ahead, the group will continue its effort in widening the customer base through geographical expansion. We will continue to expand into existing markets, namely, Europe, the United States, Canada, the Middle East, Asia, Australia, New Zealand, South America and Africa.

“Our experienced and customer-oriented marketing team will venture into new countries to further expand our customer base, ” he said in its annual report.

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Stock: [PERDANA]: PERDANA PETROLEUM BERHAD

2021-01-27 08:31 | Report Abuse

This counter need wait long time.

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Stock: [XDL]: XIDELANG HOLDINGS LTD

2021-01-27 08:30 | Report Abuse

Masks business can bring xdl to 0.12 or above, I confident that.

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Stock: [VELESTO]: VELESTO ENERGY BERHAD

2021-01-26 14:19 | Report Abuse

Based on Westwood Global’s data, the fall in local rig count appears in tandem with the massive downgrade in local jack-up rig demand by Petronas’ Activity Outlook from 16 to 10 for 2021. The new outlook expects seven and 10 local jack-up rigs for 2022 and 2023, respectively.

PETALING JAYA: Velesto Energy Bhd is anticipated to secure several short-term contracts from the second quarter of 2021, which will help offset potential weak results for the jack-up rig service provider.

UOBKayHian said in a report that Velesto is expected to report losses for the fourth quarter of 2020 and first quarter of 2021, due to falling utilisation as its existing contracts are set to expire.

“Potentially, its earnings before interest, depreciation and amortisation (EITDA) generation may fall significantly for these quarters and our estimate on its EBITDA break-even is at 30% utilisation.

“Nevertheless, we rule out default risk as long as its cash and EBITDA are over RM200mil and with interest cover of more than four times respectively. Maturing term loans in 2020 and 2021 are at RM97mil and RM107mil, respectively. The next major principal repayment is only at the end of 2022.”

UOBKayHian said Velesto’s losses are expected to widen over a three-year period by 13%, 10% and 46%, respectively, from 2021 to 2023.

“This mainly accounts for the change in our US dollar to ringgit assumption from RM4.30 to RM4.05. All other assumptions are unchanged.

“Based on recent developments, we believe our 2020 forecasts, which already factor in a weak fourth-quarter 2020, are largely intact. Velesto’s nine-months 2020 core profit was RM5.5mil.”

For 2021, UOBKayHian said it continues to assume lower average rates, especially for new contracts.

“Our 2021 utilisation forecast assumes Velesto will likely secure five to six short-term contracts that will commence by the second quarter of 2021, but overall we expect the year to be weaker compared with 2020, assuming slow contract rollouts.

“While the first quarter of 2021 may be as weak as the fourth quarter of 2020, we still expect fundamentals to recover from the second quarter of 2021 onwards.”

The research house noted that local active jack-up rig count fell year-on-year from 15 to five in January 2021.

“Based on Westwood Global’s data, the fall in local rig count appears in tandem with the massive downgrade in local jack-up rig demand by Petronas’ Activity Outlook from 16 to 10 for 2021. The new outlook expects seven and 10 local jack-up rigs for 2022 and 2023, respectively.

“The new outlook is reminiscent of Petronas’ 2018 plan. Historically, at the start of the year, rig utilisation and contract flows are slow due to monsoon seasons and these will usually pick up after March or April.”

UOBKayHian said key risks include slower-than-expected awards and higher operating expenditure. “The renewed Covid-19 lockdown is already causing setbacks in the local oil and gas (O&G) industry for contract awards and execution, despite O&G being classified as essential services.”

The research house is retaining its “hold” call on the stock, with a lower target price of 14 sen, compared with 15 sen previously.