21 ANNUAL REPORT 2024 GROUP CEO’S MESSAGE (cont’d) OUTLOOK FOR THE OSV SECTOR IN MALAYSIA (CONT’D) Outlook for OSVs the next 3 years depicts a moderate requirement in 2025 with minor fluctuations in demand until 2027 which is reflective of the planned drilling, maintenance, construction and modification (“MCM”), hook-up and commissioning (“HUC”) and turnaround and inspection (“T&I”) activities during that period. The expected combined number of AWBs and barges to support drilling and projects is 38 for 2025, with the majority of vessels required to support Drilling (Exploration and Development) and projects will be sourced via PAC’s panel contractor contract. Meanwhile, based on supply and demand analysis of OSVs in Malaysia, there will be a critical shortage of AHTS < 80MT beyond 2030, unless owners acquire new vessels. (Source: PETRONAS Activity Outlook 2025-2027) Our strategic focus lies in the AWB sector, a vital component of Malaysia’s upstream oil and gas industry, enabling us to capitalise on the tight supply-demand conditions. Malaysia’s upstream activities remain competitive, driven by efforts in maintenance, production optimisation, and the development of marginal fields. These initiatives are critical to sustaining output and extending the lifespan of existing assets, ensuring the sector’s competitiveness in the years ahead. PROSPECTS FOR 2025 Keyfield Group is primarily involved in the provision of offshore accommodation via its vessel chartering business and mainly serves the offshore oil and gas industry in Malaysia. For the financial year ending 31 December 2025 (“FYE 2025”) and foreseeable future, we expect our business activities and its prospects to be closely related to the level of offshore activities in Malaysia. We remain cautiously optimistic about our prospects for FYE 2025 and beyond, in view of the above outlook for the OSV segment since we are panel contractor for AWBs, AHTS and PSV. We remain committed to capitalising on emerging business opportunities while managing our fleet and operations prudently and carefully, staying vigilant to the challenges posed by the evolving business environment which we operate in and beyond. We have also been expanding our fleet with additional own vessels especially since 2022, which has been a key driver for our revenue and profit growth in these years. Post-IPO, we have strengthened our balance sheet and with our maiden Sukuk Wakalah issuance amounting to RM200.0 million, this resulted in a healthy cash and cash equivalents balance of RM321.6 million with no other bank borrowings as of 31 December 2024. Building this “war chest,” coupled with timely vessel acquisition opportunities, has enabled us to achieve our fleet expansion targets outlined in our IPO Prospectus, as below: 1. Acquisition of Keyfield Itqan, a DP2 AWB, which was completed in July 2024; 2. Acquisition of Keyfield Aulia, a DP1 AHTS, which was completed in August 2024; 3. Entering into a Shipbuilding Contract with a shipyard to construct a newbuild DP2 AWB. The newbuild DP2 AWB will have enhanced features such as a larger accommodation capacity of 239 persons, diesel-electric propulsion systems for fuel savings, solar panel with battery pack, larger deck space and higher capacity main crane. We expect to take delivery of the newbuild DP2 AWB in 2026. In January 2025, we also acquired Keyfield Gratitude, a 78.5M DP2 Platform Supply Vessel, which has completed its dry dock and ready to be deployed into our chartering operations. We are pleased to announce our successful expansion into India and the Middle East with the deployment of Keyfield Lestari (“Lestari”), our 4-point mooring AWB operating in India, and Keyfield Aulia, our DP1 65T bollard pull AHTS serving the Middle East market for about 2 years. This international expansion not only strengthens our global presence but also represents a strategic move for Keyfield in terms of optimising fleet utilisation and enhancing overall operational efficiency throughout the year.
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