DNeX's Indonesian consortium secures three-year submarine job with estimated revenue of RM186m
KUALA LUMPUR (May 18): Dagang NeXchange Bhd (DNeX) said its Indonesian consortium has bagged a three-year contract, with an option to extend for a further three years, to supply installation and maintenance support services of submarine cable communications system via the group's vessel.
The consortium, which was formed between its business unit PT DNeX Telco Indonesia and PT Samudera Mbiantu Sesami, has signed an agreement with PT Infrastruktur Telekomunikasi Indonesia (TelkomInfra) to provide the services, DNeX said in a statement today.
Under the agreement, TelkomInfra will pay a standby charge of 213 billion rupiah (RM63 million) over the initial three-year period, excluding daily rates applicable depending on the work scope.
With an assumption of 65% vessel utilisation rate in a year, estimated total revenue per year including standby charge is 215 billion rupiah (RM62 million).
Thus, revenue for the initial three years of contract can reach up to RM186 million, said DNeX.
The group said the submarine cable communications system and maintenance support services will be supplied to TelkomInfra's parent company, PT Telkom Indonesia Tbk, an Indonesian multinational telecommunications conglomerate, which is listed on the Indonesia Stock Exchange and has a secondary listing on the New York Stock Exchange.
"The new contract can help propel the company to become a leading regional player in submarine cable laying, maintenance and repair works," said DNeX group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir.
"In the Asia-Pacific region, Indonesia has one of the largest population of about 270 million people and one of the world's fastest growing population of smartphone users, which can translate into growing demand for higher speed of data connectivity," he said.
He added that international technology giants Facebook and Google have recently announced major investments in Indonesia, which include the construction of two new subsea cables connecting Indonesia and the US.
"These major infrastructure developments present a new and attractive market opportunity for our submarine cable business," Syed Zainal Abidin said.
DNeX currently provides end-to-end subsea and marine engineering services for all types of submarine cables through its submarine cable laying and repair vessel CS DNeX Pacific Link.
The vessel is equipped with state-of-the-art effective and stable dynamic positioning capability, classified as DP2, to ensure the accuracy of the vessel's position.
With an accommodation capacity of 58 people, a service speed of nine knots and an endurance of 50 days, the vessel is rightly able to carry out cable laying as well as repair and maintenance of submarine cables, said DNeX.
DNex's shares closed 11 sen or 16.67% higher at 77 sen today, valuing the group at RM1.83 billion. Over the past year, it has risen 305% from 19 sen.