PETALING JAYA: Analysts are expecting solid earnings prospects for Wasco Bhd , underpinned by recent job wins and healthy order book.
Maybank Investment Bank (Maybank IB) said Wasco’s mid-term outlook showed good promise with its order book standing at RM3.1bil as of end-December 2023.
The research house noted that the energy services company also has a robust tender book of RM7bil.
“We forecast a 31% net profit growth in financial year 2024 (FY24), as we understand that the bulk of the accelerated progress billings for the RM1.1bil East African Crude Oil Pipeline and RM558mil Yinson Holdings Bhd projects will be recognised this year. “Current completion rate for both projects stand at 40% and 50% respectively,” Maybank IB said in a report yesterday.
For FY23, Wasco reported a net profit of RM108.4mil, compared with a net loss of RM6.3mil in the previous corresponding period. Revenue improved to RM2.6bil from RM2.37bil a year earlier.
In a statement accompanying its FY23 results, Wasco said it had upgraded its UK pipe coating facility at the Port of Hartlepool to offer additional coating services from the buoyant demand from this sector.
“This upgrade is set to conclude in March 2024, followed by a testing phase, with full-scale production commencing in April 2024.”Separately, the research house said its assessment of Wasco’s overall environmental, social and governance (ESG) score, under its proprietary ESG scoring methodology, was 48 out of 100.
This, Maybank IB said, made the group’s ESG rating slightly below average.
“We think that while Wasco has decent ESG targets and qualitative parameters, more needs to be done with regard to its emission disclosures.”
It said Wasco did not have data on its Scope 3, sulphur oxides and volatile organic compounds emissions.
“Wasco can improve by introducing renewable energy into its source of energy mix, energy consumption and greenhouse gas emissions intensity,” it added.