SERBADK (5279) - SERBADK In 350 Million Ringgit Acquisition Talks today.


Malaysian oil-and-gas services provider Serba Dinamik Holdings is in talks to acquire a company that could cost as much as 350 million ringgit ($85.59 million) to help add capabilities and expand geographical foot print, its chief executive said.

A deal could be reached within a year, Mohd Abdul Karim Abdullah told Nikkei Markets in an interview. Orders-in-hand could grow to 7.5 billion ringgit in 2018 from the current 5 billion ringgit, in part driven by contracts from Central Asia and Africa, he said. The company is bidding for contracts worth 10 billion ringgit, he added.

SERBADK is looking for opportunities to acquire companies to gain access to patent and design, human capital and track record, and also strengthen Serba Dinamik’s position in other parts of the world that SERBADK are not present at the moment.

The push for growth amid projected rise in orders comes at a time when the oil sector is showing signs of climbing out of its doldrums with prices gaining some 15% so far this year. Oil prices have racked up more than 49% gain since the end of 2015.

Securing contracts in new markets would also further diversify Serba Dinamik’s sources of income amid concerns over political instability in the Middle East, a region that currently contributes about 60% to the company’s revenue.

Last month, Saudi Arabia initiated a crackdown against graft that led to high-profile arrests of 11 princes and dozens of top government officials. Uncertainty is rising in Saudi Arabia as King Salman is reportedly preparing to hand over power to Crown Prince Mohammed Salman.

Serba Dinamik expects “very good prospects” for new orders in Turkmenistan, Kazakhstan and Uzbekistan.

SERBADK expect to benefit from strong relations between our countries, as well as relative political stability.

SERBADK also plans to ramp up its presence in African markets such as Senegal, Côte d’Ivoire and Guinea. “African countries have urgent technology requirements and they are moving on a fast-track situation to develop their economy.

Serba Dinamik’s net profit for the third quarter ended Sep. 30 jumped 51.3% from a year ago, helped by higher revenue across all its segments.

For the full year, Serba Dinamik expects to meet its own target of 15%-20% net profit growth.