Dayang is an oilfield services company operating mainly in Malaysia. It initially focussed on topside maintenance services where it is one of the big boys in the offshore hook-up and commissioning business.
The company did very well in the topside maintenance services segment and got into trouble when it expanded its marine charter business in the early part of the last decade with the acquisition of Perdana Petroleum.
Business was good for the Malaysian marine charter scene until crude oil prices dropped to about USD 60 per barrel in 2016/17. The demand for marine charter services declined tremendously and many of the Bursa marine charter companies got into trouble. Dayang faced similar problem with its marine charter segment.
While crude oil prices today are 1/3 higher than the lows in 2016/17, the marine charter business has yet to fully recover. While Dayang topside services business is doing very well, its performance has been pulled down by the marine charter segment. The table below shows the relative performance of the 2 segments for Dayang.
Dayang spent tons of money on the marine charter business. With hindsight shareholders would have been better off if this was paid out as dividends rather than spent it on Perdana Petroleum. Did management do a good job in allocating capital?
For more insights into Dayang, go to Is Dayang one of the better Bursa stocks?