The research arm of Kenanga Investment Bank Bhd (Kenagna Research) recapped that Petronas incurred a capex of RM7.4 billion during the first quarter of financial year 2022 (1QFY22).
KUCHING (June 2): Dayang Enterprise Holdings Bhd (Dayang) and Uzma Bhd (Uzma) to benefit from the anticipated pick up in Petroliam Nasional Bhd’s (Petronas) capex spend, analysts reiterate.
The research arm of Kenanga Investment Bank Bhd (Kenagna Research) recapped that Petronas incurred a capex of RM7.4 billion during the first quarter of financial year 2022 (1QFY22).
While this was a 12 per cent increase year on year (y-o-y), the capex figure also represented a 48 per cent decline quarter on quarter (q-o-q) – although Kenanga Research noted the seasonally higher capex during the 4Q.
“Although the increased y-o-y capex is a welcomed positive, we believe more capex investments must be incurred in the coming quarters in order to meet expectations of a full-year capex of at least RM40 billion to RM50 billion,” the research arm said.
“This is backed by the group’s healthy net-cash position of approximately RM91 billion (up 35 per cent q-o-q, up 65 per cent y-o-y).
“Petronas claims that domestic capex during the quarter had risen 30 per cent y-o-y, and is gradually on track to recovering to 2019 levels.
“Additionally, dividend commitments stayed flat at RM25 billion in 2022 (of which RM3 billion was already paid during the quarter), despite the better profits – thus building up the group’s war chest for further necessary investments in the coming periods.”
According to Kenanga Research, with an anticipated pick up in Petronas’ capex spend going forward, local activity levels are also expected to see some mild recovery.
“Earlier in our read-through of Petronas’ latest activity outlook, we have highlighted Dayang to be one of the key beneficiaries, given the planned increase in offshore maintenance, construction and modification (MCM), and hook-up and commissioning (HUC) works.
“Meanwhile, we believe Uzma could also benefit from the increased level of brownfield activities – especially in an environment of higher oil prices as producers would be more incentivised to enhance well productions.”
from Borneo Post Online https://bit.ly/3aCnc5t
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