SINGAPORE (June 1): OCBC is maintaining its “hold” call on PACC Offshore Services Holdings (POSH) with a higher fair value estimate of 33.5 cents.
Despite POSH being involved in the towing and positioning of Shell Prelude, the world’s largest offshore facility, OCBC says persisting challenges in the operating environment for the broader offshore & marine sector remain.
To recap, Samsung Heavy Industries is set to deliver Shell Prelude to Sydney, Australia in end-June. Two local companies, POSH and Ezion, will be supporting the project.
(See also: PACC Offshore to provide towage and positioning services to world largest offshore facility)
In a Thursday report, lead analyst Low Pei Han notes POSH’s role in the project as significant, given how the group will be providing POSH Arcadia to house up to 750 workers during the hook-up and commissioning phase – which Low calls a “huge undertaking”. Furthermore, for the towing work, five of POSH’s vessels will be deployed.
“After a relatively quiet 1Q17, POSH Terasea is expected to ramp up and remain busy for the rest of the year. This compares to net loss of US$7.8 million in 2016 and net profit of US$15.7 million ($21.7 million) in 2015,” adds Low, referring to the 50-50 JV between POSH and Terasea, a JV between Ezion and Seabridge Marine Services.
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Besides Shell Prelude, POSH Terasea is also scheduled to work for the INPEX Ichthys CPF and FPSO, as well as Egina FPSO unit.
POSH shares are trading flat at 31 cents on Thursday.
