Steel Hawk Expects Sustained Strong Momentum In FY2025

By Siti Radziah Hamzah

KUALA LUMPUR, April 9 (Bernama) -- Oil and gas services provider Steel Hawk Bhd is expected to record double digit growth for its earnings and revenue in the financial year ending Dec 31, 2025 (FY2025), said executive director Datuk Sharman K. Michael.

In an interview with Bernama recently, he said the expected higher performance, anchored on its current contracts, would keep the group busy until 2030 and would contribute between RM2.3 billion and RM2.5 billion to the group in five years. 

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"We have brought in a new group chief executive officer (CEO), and also redesignated our current chief operating officer (COO) to become a managing director for our subsidiary. All these restructuring is because we want to expand our business portfolio," he told Bernama recently. 

In February, the group announced the appointment of Afizul Md Yusoff as its group chief executive officer effective immediately, while Khairul Nazri Kamarudin was redesignated from COO to MD of Steel Hawk Engineering Sdn Bhd, a wholly owned subsidiary of Steel Hawk and a panel contractor for construction and modification works for Petroliam Nasional Bhd (Petronas).

Replacing Khairul is Alias Anuar as the new group COO.

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The ACE Market listed company had recorded a higher net profit of RM12.65 million in the financial year ended Dec 31, 2024 (FY2024), against RM7.22 million a year earlier. Revenue for FY2024 also strengthened to RM78.42 million versus RM72.54 million, mainly driven by higher work orders across all business segments.  

Its engineering, procurement, construction and commissioning (EPCC) services remain as the group's biggest revenue driver, contributing RM65.49 million, which made up 83.51 per cent of Steel Hawk's total revenue. 

Steel Hawk operates in Terengganu, Sarawak, Johor, and Labuan.

"We have offices and facilities in these states. We cannot rely only on Terengganu (its main market) to fulfill all these regions, where we have secured contracts in the East Coast, West Coast, south region, Sabah and Sarawak. 

“We are also ramping up our fabrication yard in Teluk Kalong (in Terengganu) plus other facilities to support our business," he said, adding that the group aims to expand its operations in Southeast Asian markets in the next three to five years.  

In November 2024, Steel Hawk was appointed as a panel contractor for all five available packages under Petronas and its 27 downstream operating plant units, making it a much bigger deal in terms of scale, revenue potential and geographical coverage. 

Sharman said the contract runs for three years, with an option to extend for another 1+1 years, giving Steel Hawk solid earnings visibility. 

He pointed out that the group wanted to strengthen its presence locally due to the huge potential in Malaysia's oil and gas industry. 

"Our market share in the industry is less than one per cent, there is still room for growth. Expanding into more  Southeast Asian markets is definitely something we will consider in the near future, but right now, our focus is one Malaysia," he added. 

On the group's risk mitigation plan, Sharman said while Petronas is its major client, the group is actively diversifying by engaging with other oil and gas players.

“We do not solely focus on Petronas. We will engage in tenders that align with our skills and capabilities, aiming to expand our opportunities and foster trust with new clients," he said, adding that the group has no project delays due to its efficient supply chain management and proactive monitoring to address issues quickly. 

Steel Hawk is a Petronas-licensed OGSE company, which is principally involved in the provision of onshore and offshore support services for the oil and gas industry. The group’s business activities provide support to the upstream, midstream and downstream segments of the value chain.  

In February, Maybank Investment Bank Bhd outlined several risk factors including Steel Hawk's dependency on Petronas as a major client, potential delays in project delivery and exposure to credit risks.

The investment bank said Steel Hawk is dependent on Petronas as its major customer, which contributed 85.8 per cent, 54.5 per cent and 45.6 per cent of the group’s total revenue in FY2021-FY2023.

On the ongoing gas distribution issues between Petronas and Petros given Steel Hawk’s presence in Sarawak, Sharman noted that the change in gas distribution management does not affect the group's commitment to submitting tenders for relevant projects. 

"What is important is that we are assessed based on our expertise in the region, which works to our advantage. Additionally, we do hold Petros approved vendor licence, allowing us to participate in Sarawak tenders," he added.  

-- BERNAMA