KUALA LUMPUR: Offshore support outfit Icon Offshore Bhd expects to chart a better financial performance for the year ending Dec 31, 2022 (FY2022) on the back of higher demand for its services as well as the uptick in the daily charter rate (DCR).
Managing director Datuk Seri Hadian Hashim said the company has also improved the utilisation rate of its offshore support vessels (OSVs) and jack-up drilling rig to 90 per cent last year from 72 per cent in 2019.
"The OSVs are making money, the rig is performing very well and there is no downtime since we started operation of the rig from the end of quarter one to the beginning of quarter two, we have been 100 per cent operating.
"We also have made a lot of changes by looking at staff numbers, the cost and how we could do better. We have done rationalisation of vendors and also streamlined a lot of things," he told Bernama.
Hadian took the helm of Icon Offshore in September 2019 with the task of turning the group around. Prior to Hadian’s appointment at Icon Offshore, the group did not have a CEO for two years after the departure of Datuk Seri Amir Hamzah Azizan in 2017.
"The company has done reasonably well in the last three years. I am happy that the company has gone the way it has, primarily because there is no external talent in that sense, except for me and I didn't come with an entourage.
"What it means is that there are good talents in the company and you need to open up and be more engaging. When I came to the company, the first day I came I did a town hall and declared to the staff that this is what we need to do," he noted.
Hadian said Icon Offshore's order book was at a healthy level of RM743 million, comprising a majority of RM677 million in the OSV segment in Malaysia and Brunei, enough to keep the company busy for 2.5 years while the remaining was in its drilling segment.
Its tender book currently stands at RM1.4 billion, consisting of RM930 million in the OSV space with the remaining in drilling operations.
Currently, 40 per cent of Icon Offshore’s revenue is contributed by its OSV business in Malaysia followed by OSV operations in Brunei (30 per cent) and its drilling segment contributes the remaining 30 per cent.
The group has completed its drilling business acquisition in February 2021 which was fully operational in the second quarter of 2021.
"For us, the acquisition is opportunistic. We took a way below market price and we saw that it has worked, it is just that things need to be better organised whether it is in terms of financing and people. The downside for us is very minimal," said Hadian.
Icon Offshore posted a net profit of RM25.58 million for FY2021 against RM27.77 million year-on-year.
The full-year revenue of RM301 million breached the RM300 million mark, the level which was last recorded by Icon in FY2014 at the height of crude oil prices, against RM212.07 million a year earlier mainly due to revenue from the drilling segment and higher utilisation of vessels in the OSV segment for the current year.
Expansion into new market
Icon Offshore currently has presence in Malaysia and Brunei.
Hadian said Icon Offshore is not in a hurry to expand into new markets as the company "has enough to digest at the moment". He pointed out the company has a strong partner in Brunei.
"What we have done in Brunei last year was to let them manage all three AWBs for us and also to at least increase the local participation to meet the Brunei requirement.
"Regional expansion beyond Brunei, I won't rule it out but I am not saying that it will be immediate because I want to chew on what I have," said Hadian, adding that the company is looking to move into securing lighter assets.
"There is enough exposure by the company in heavy assets. We need to look at whether any growth or future expansion will be in the light services either in human resource or assets,” he added.
On mergers and acquisitions, Hadian said Icon Offshore is open to opportunities with its focus on service oriented assets.
"If anything reasonable comes along, and they need partners or cash, why not? But it will not be anymore heavy assets. We are looking at a few possibilities but we are not in a hurry in that sense. But we will take it up at the price that we want," he added
Russia-Ukraine Conflict
Hadian said the ongoing Russia-Ukraine conflict would pose a short-term impact on the oil and gas industry.
He pointed out that the world, especially Europe, needs Russia as 40 per cent of Russian gas and 25 per cent of its crude oil went to Europe. "In today's terms, it would mean one billion euro per day that the Russians are reaping out of this. Will the oil prices continue to be high?
"There will be checks and balances. If you ask me what will be the reasonable price going forward, it would be US$80 to US$90 per barrel, a comfortable range and in most oil companies' budgets," he added.
Last week, United States President Joe Biden imposed an immediate ban on Russian oil and other energy imports in retaliation for Russia’s invasion of Ukraine, while the United Kingdom said it would phase out imports by the end of 2022.
The US import ban on Russian oil is part of a broader prohibition that includes natural gas and coal.
At the time of writing, Brent crude rose 3.05 per cent to US$112.70 per barrel. - Bernama