Swift Energy unfazed by Petronas capex cut, cites diversified revenue streams

KUALA LUMPUR: Swift Energy Technology Bhd, a provider of industrial automation and power systems, is unfazed by capital expenditure cuts at Petroliam Nasional Bhd (Petronas), thanks to its diversified revenue streams.

CEO Tan Bin Chee said Swift Energy has diversified revenue streams with balanced reliance on oil and gas, edible oil and utilities with clients across various industries and countries.

“Each year, different national oil companies or engineering, procurement, construction, and commissioning (EPCC) players will take turns to be a prominent contributor to our business revenue. This year, it could be Petronas, next year Shell and the year after that Wilmar, for example. In 2021, our edible oil business contributed 39% of our revenue, and this primarily comes from the oil and grains business,” he told a press conference after its listing today.

He stressed, “All the national oil companies are very important customers to us. All the EPCC customers are very important to us, but we are not overly dependent on either one. We don’t rely on a single customer to dominate our revenue sources.”

Tan said Swift Energy has served many national oil companies over the past 22 years. It has also worked with numerous international EPCC companies from South Korea, Europe and Asean countries. “At the same time, we have major edible oil customers such as IOI and KLK. In Indonesia, we work with Mosin Mask, Sinarmas, and PT Smart. This diversification ensures we are not overly reliant on any single EPCC or national oil company.”

Tan highlighted the company’s focus on greener energy sources, particularly natural gas. “Our Ex Solar PV systems are designed to provide off-grid power supply requirements for production activities on wellhead platforms specifically built for natural gas production.”

Furthermore, Tan said, Swift Energy is negotiating for several Ex Solar PV projects. Upon securing them, the company expects these projects to significantly contribute to its order book.

“One project is in Malaysia, and another is in Africa. We continue to see sustained investment in this area. At the same time, both our oil and gas business and utility business have equally supported us in achieving our annual revenue targets,” he said.

Swift Energy made its debut as a listed company on the ACE Market of Bursa Malaysia Securities today.

The company’s shares opened at 36 sen, representing a 28.6% premium over its issue price of 28 sen per share, with an opening trading volume of 33.58 million shares.

The company raised RM70.06 million through the public issuance of 250.2 million new ordinary shares at 28 senn each.

From the total proceeds, Swift Energy has earmarked 40% to be allocated for the expansion of fabrication facilities, storage, office and a new research and development (R&D) centre. Additionally, 3.1% of proceeds, supplemented by internally generated funds and bank borrowings, will be used to acquire machinery, equipment, and software. The remaining 56.9% of proceeds will be directed towards establishing the R&D centre, business expansion, repayment of borrowings, working capital, and covering listing expenses.

The company’s shares are classified as syariah-compliant by the Shariah Advisory Council of Securities Commission Malaysia. The company’s public issue portion was oversubscribed by 58 times.

Swift Energy chairman Mohammad Nizar Idris said its achievements reflect the trust and strong relationships it has built with clients, with 78% of revenue driven by integrated solutions that enhance operational efficiency, and 22% from value-added services.

“As Malaysia’s only IECEx-certified manufacturer for Ex solar PV modules and other critical equipment, we are globally recognised for our technical expertise and commitment to safety. Our partnerships, including being an approved Siemens partner, further strengthen our position as a leader in delivering advanced solutions,” he said.

M & A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for Swift Energy’s IPO exercise.