FSO vessel to contribute RM139m - EA Technique MD

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KUALA LUMPUR (Dec 11): Newly-listed EA Technique (M) Bhd expects its floating storage and offloading (FSO) vessel, which will be completed in April 2015, to contribute some US$40 million (RM139 million) to revenue over the next four years.

EA Technique managing director Datuk Abdul Hak Md Amin said the FSO vessel, which was being converted from an oil tanker, would provide a new revenue stream for the company.

Abdul Hak said the conversion of the vessel was also in line with the company's effort to diversify into the upstream segment of the oil and gas (O&G) sector.

“The ship will be completed as per schedule, by April next year. It will provide a new revenue stream for us,” Abdul Hak said at a press conference in conjunction with EA Technique's listing today.

EA Technique's initial public offering intended to raise RM74.1 million. Of the total proceeds, a RM29.2 million portion has been allocated for capital expenditure (capex).

The capex will finance the oil tanker conversion and enhancement of its ship-building facilities in Hutan Melintang, Perak, to include a dry dock to accommodate more ships.

He said EA Technique aimed to capitalise on the high vessel traffic through the Strait of Malacca.

EA Technique's ship-building unit has been busy with an order book of RM1.2 billion, which will keep the company busy up to 2025, said Abdul Hak.

It is also tendering for RM1 billion worth of contracts.

“We are aiming to win at least 50% of the contracts we are tendering for. These contracts are all for domestic clients,” said Abdul Hak.

On the current low crude oil price environment, he said that there had not been a significant impact on EA Technique’s performance. This is because the value of its contracts was already locked in.

EA Technique’s IPO involved a public issue of 114 million new shares at 65 sen each to raise RM74.1 million for the company.

The IPO included an offer for sale of 15 million existing shares shares at a similar price.

At 12.30pm, EA Technique shares were down 10 sen or 15% at 55 sen for a market capitalisation of RM277.2 million.

The stock saw some 41 million shares done.