E.A. Technique (M) Bhd (EATech), a Main Market-listed marine transportation and offshore storage outfit, is on track to uplift its Practice Note 17 (PN17) status by 1Q 2025 following the successful implementation of its regularisation plan in 2024 coupled with consistent improvements in the group’s revenue and profitability.
“We have already achieved significant milestones in improving our financial position and operational efficiency,” EATech executive director Datuk Wira Mubarak Hussain Akhtar Husin pointed out when addressing the company’s prospects.
“The marine transportation and offshore storage industry is experiencing an upward trend with EATech is well-positioned to take advantage of this environment. Our commitment is to build a stronger, more resilient company that continues to deliver value for shareholders.”
EATech was placed under PN17 due to a decline in shareholders’ equity after facing complications and setbacks caused by prolonged negotiations and the COVID-19 pandemic.
This resulted in the group having incurred variation costs for its foray into the EPCIC (engineering, procurement, construction, installation, and commissioning) sector to convert a tanker into a floating production storage and offloading (FPSO) facility.
But EATech has since worked diligently to restructure its financial standing. With the completion of its regularisation plan in mid-2024, EATech is now focused on achieving two consecutive profitable quarters, a key requirement for its PN17 upliftment.
For its 1H FY2024, EATech reported a revenue of RM61.81 mil with a gross profit margin of 41% which is above the industry average.
It recorded a core profit of RM12.17 mil during that period while showcasing its ability to sustain profitable operations.
This financial performance is underpinned by a robust order book with firm contracts valued at RM136.3 mil and additional optional contracts worth RM281.2 mil which together provide earnings visibility for the coming years.
‘White knights’
“Our utilisation rate currently stands at 97% and we’re confident of achieving continued profitability with major contracts in place. This will enable us to meet the requirements for exiting PN17,’projected Mubarak.
The entry of new shareholders and leaders who include Mubarak and Kinergy Advancement Bhd group managing director Datuk Lai Keng Onn is seen as a pivotal moment for EATech.
Their acquisition of a 51% stake in the company through Voultier Sdn Bhd has been instrumental in stabilising and growing EATech.
By bringing decades of industry experience, the duo has provided providing strategic direction while leveraging their extensive network to drive future growth.
“As new leaders, Lai and I are committed to steering EATech towards sustained growth and long-term success,” pledged Mubarak. “Our entry into EATech as white knights was not merely about financial investment but also about re-shaping and expanding the company’s future.”
He added: “Together, we saw immense potential in EATech, and our goal is to build on the group’s over 30-year legacy while exploring new opportunities within the marine transportation and offshore storage sector.”
In addition to exiting PN17, EATech is aggressively pursuing new opportunities. The group is in the final stages of tendering for several high-value contracts, including an anticipated project with PETRONAS for the Nautica Tembikai FSO (floating storage and offloading unit).
Moreover, EATech has also diversified its client base recently by registering itself as a vendor with Brunei Shell which opens up new avenues for long-term contracts at higher charter rates.
At the close of today’s market trading. EATech was down 0.5 sen or 1.64% at 30 sen with 1.73 million shares traded, thus valuing the company at RM398 mil. – Oct 14, 2024
