PRM – 3Q26F: Earnings momentum intact

PRM offers a compelling combination of stable earnings growth, improving shareholder returns, and an attractive valuation. We expect 3Q26F net profit (due November 12) to rise 3.5% YoY and 5.9% QoQ, supported by full FSU and COC fleet utilization, resilient tanker demand, lower SG&A expenses, and favorable FX movements. While 4Q26 earnings may soften temporarily due to maintenance activities, this should enhance fleet availability and earnings visibility in 2027. Fleet expansion, stronger FSU utilization, and a potential increase in dividends from 2026 operations underpin our positive outlook. Maintain OUTPERFORM with a TP of Bt11.40 and dividend yield of nearly 7%.

Stable operations drive modest earnings growth. We expect PRM to report 3Q26 net profit of Bt583mn, up 3.5% YoY and 5.9% QoQ, driven by stable operations across its core businesses, lower SG&A expenses, and favorable FX movements. Revenue is forecast to rise 1.8% YoY and 2.1% QoQ, supported by full utilization of the FSU and COC fleets as well as a weaker Thai baht, given that approximately 70% of revenue is denominated in US$. Excluding FX impacts, we estimate core profit at Bt568mn, up 6.4% QoQ, reflecting continued earnings resilience despite limited operational changes from 2Q26.

PCT revenue growth offset by margin dilution. The PCT segment is expected to post slightly higher revenue following fleet expansion, including the addition of one chemical tanker in 3Q26 after three vessels entered service in 2Q26. However, earnings contribution from these vessels is likely to remain limited as they are still operating under spot contracts rather than higher-margin time charter agreements. We expect PCT margins should remain broadly in line with 2Q26 despite higher revenue. Meanwhile, the offshore segment is expected to deliver a slight improvement in earnings as vessel utilization returned to normal levels after maintenance activities.

4Q26 outlook: seasonal softening from maintenance activities. We expect earnings to soften modestly in 4Q26 as PRM potentially brings forward selected drydock activities from 2027, including several large COC vessels. The move is intended to ease an otherwise heavy 2027 maintenance schedule, which currently involves more than 20 vessels across multiple fleet segments. While the revised plan has yet to be finalized, additional off-hire days and drydock expenses could weigh on 4Q26 earnings. However, the impact should be temporary and is likely to improve fleet availability, operational flexibility, and earnings visibility in 2027.

Maintain a positive outlook; TP maintained at Bt11.40. We remain constructive on PRM, supported by stronger FSU utilization, resilient tanker demand, and fleet expansion. Dividend prospects are improving, with a higher dividend from 2026 operations than from 2025 operations expected. We anticipate an interim dividend announcement following the 3Q26 results, after the company paid a special dividend in September. Our TP of Bt11.40 is based on an EV/EBITDA multiple of 5.4x (-0.5 SD). The attractive dividend yield of nearly 7% also supports our OUTPERFORM rating.

Key risks include weaker oil demand affecting tanker and offshore services, oil price volatility, changes in international maritime regulations, and FX volatility. ESG risks include emissions and potential ecosystem impacts from offshore operations.