Perdana should rise further, yet to realise full potential

Perdana Petroleum Bhd has been seeing a good run in its share price year to date, surging some 70%. The counter – which has climbed from a low of 18 sen in mid-Dec 2023 to the peak of 51 sen in mid-Jul this year before pulling back to 36.5 sen currently. It appears that an upward trajectory is on the horizon.


Its share price is not the only one surging as it saw a strong 2QFY24 earnings momentum. The group reported a 4-fold jump in net profit to RM34.7 million in 2QFY24.

This brought its 1HFY24 performance to a normalised net profit of RM50.3 million. This was nearly tripling from the RM17.2 million it recorded in 1H2023, boosted by higher vessel fleet utilisation at 76% versus 50% in 1H2023 and charter rates. Based on its book value per share of 33 sen as of end-Jun 2024, the stock is presently trading at a Price/book multiple of 1.1x.

Perdana is a leading provider of offshore marine support services for the oil and gas industry. The company is likely to benefit from the growing OSV market, which has not yet reached its peak despite some subsegments of vessels achieving all-time high daily charter rates (DCRs).

As it is, the domestic OSV supply is not expected to grow significantly in 2024 and 2025, as there is yet any large order flows for OSV new builds. The supply increase in the local OSV market is still far from catching up with the incoming demand from Petronas and other oil producers.

Taking PETR’s strong earnings delivery and operational performance into consideration, alongside the still buoyant outlook for OSVs. Essentially, investors should be positive, taking Perdana’s strong earnings delivery and operational performance into consideration, alongside the still buoyant outlook for OSVs.