Weak AWB to weigh on Keyfield’s bottom line 

PETALING JAYA: Keyfield International Bhd’s earnings are expected to remain under pressure this year as weaker charter rates for accommodation work barges (AWB) and a shift towards lower-margin vessels weigh on profitability, despite an anticipated recovery in third-quarter earnings.

In a report, Phillip Capital said the offshore support vessel or OSV operator’s earnings should improve quarter-on-quarter in the third quarter of 2026 (3Q26), supported by higher vessel utilisation and increased chartered days. Keyfield noted that utilisation is expected to exceed 80%, compared with 69% in 2Q26.

“Utilisation is expected to exceed 80%, compared with 69% in 2Q26, following the deployment of two vessels to the Middle East and the commencement of operations by Keyfield Joyful and an additional third-party anchor handling tug supply (AHTS) vessel in July and August respectively,” the research firm said.

However, utilisation is expected to ease to about 60% in 4Q26 due to the monsoon season.

For the year, Phillip Capital said it estimates utilisation will be flat at 63%, similar to 2025, adding it also expects 2026 estimated earnings to decline, mainly due to weaker AWB daily charter rates (DCR) and earnings before interest, taxes, depreciation, and amortisation margins.

This will weigh on Keyfield’s earnings as Petroliam Nasional Bhd (PETRONAS) prioritises production output and defers maintenance, construction and modification or MCM activities.

The prolonged uncertainty surrounding the PETRONAS-Petros arrangement and the transition of offshore asset ownership are also expected to dampen demand for AWB’s.

Phillip Capital said it forecasts a 10% to 15% year-on-year decline in average AWB DCR.

The higher proportion of AHTS vessels in Keyfield’s fleet is also expected to dilute margins, as these vessels generally command lower charter rates and generate less revenue from catering and ancillary services than AWB’s.

With that, the research firm said it will cut Keyfield’s core earnings forecasts for 2026, 2027 and 2028 by 19%, 5% and 4%, respectively.

It also expects 2026 core net profit to fall 29% to RM77.7mil, from RM109.4mil in 2025.

Revenue is forecast to decline 10.9% to RM383.5mil in 2026, before recovering to RM498.9mil in 2027 and RM558.8mil in 2028.

Meanwhile, Keyfield is diversifying its earnings base beyond just oil and gas, targeting non-oil and gas businesses to contribute 20% of group profit over time.

“The group first ventured into cable-laying by acquiring Keyfield Blessing, a DP2 cable-laying barge, in April last year. It has now expanded into dredging with the acquisition of Inai Kenanga, a mega trailing suction hopper dredger or TSHD, for a cash consideration of US$24.7mil,” Phillip Capital said.

The acquisition is targeted for completion by November 2026, with operations expected to commence in 3Q27 following dry-docking and reactivation.

The research firm said it has yet to factor in any earnings contribution from the vessel but will maintain its “hold” call.

However, Phillip Capital has lowered its 12-month target price to RM1.42 from RM1.50, citing limited near-term catalysts for a share price re-rating amid subdued offshore oil and gas activity.