KUALA LUMPUR: Orkim Bhd, the owner-operator of clean petroleum product (CPP) and liquefied petroleum gas (LPG) tankers in Malaysia, is leveraging its long-standing partnerships with major energy players to maintain a stable and predictable revenue stream.
The company has long-standing partnerships with Petronas Group for 16 years, Shell Group for 15 years, and four years each with Petron Malaysia and BHPetrol – relationships that together account for over 90 per cent of its revenue, according to Malacca Securities.
Supported by long-term contracts ranging from two to 10 years, these partnerships not only provide strong revenue visibility but also enhance Orkim’s credibility in securing new business opportunities, the firm said in a note.
Malacca Securities said that such alliances allow the company to capitalise on structural demand from Malaysia’s growing downstream energy sector and major projects like the Pengerang Integrated Petroleum Complex (PIPC).
By combining established client relationships with long-term contracts, Orkim strengthens its earnings base and positions itself for regional expansion and sustained leadership in the marine energy transportation sector.
The company operates a wide network across 93 loading and discharge points in Malaysia and key Asian markets, including Singapore, the Philippines, Indonesia, Brunei, and China. Orkim’s fleet recorded over 6,500 port calls, servicing domestic routes and flexible regional voyages to meet client demand.
Malacca Securities highlighted that the CPP and LPG marine transportation sector is highly capital-intensive, with strict technical compliance and regulatory licensing requirements such as domestic shipping and Petronas licences.
Orkim’s adherence to these standards, coupled with performance awards, positions the company strongly against new entrants in the market.
The research firm projects a three-year earnings compounded annual growth rate (CAGR) of 2.9 per cent, with core PATMI expected to reach RM86.3 million, RM94 million, and RM101.4 million, supported by new vessel additions post-IPO (initial public offering) and improved charter rates.
Orkim recently launched a Main Market IPO priced at 92 sen per share, targeting a RM920 million market valuation and raising RM92 million.
Chief executive officer Captain Cheah Sin Bi said 87 per cent of the proceeds, or RM80 million, will be allocated to acquiring new vessels, including chemical and petroleum product tankers with 9,000 deadweight tonnes (DWT), to rejuvenate and expand the fleet.
The company currently operates 18 vessels with a combined capacity of 239,186 DWT, comprising 14 CPP tankers (134,684 DWT), two medium-range CPP tankers (98,004 DWT), and two LPG tankers (6,498 DWT).
Recurring revenue from time charter, CVC, and COA arrangements, which contribute 60–95 per cent of annual revenue, underpins the business model, providing predictable cash flows.
With an estimated RM614.2 million in time charter contract value, Orkim commands around 56 per cent of Malaysia’s registered CPP tankers and transported 12 per cent of the country’s refined petroleum product volume in 2024, positioning the group for sustainable growth and expanded regional market share.
© New Straits Times Press (M) Bhd
