KUALA LUMPUR, Aug 13 (Bernama) -- Petra Perdana's decision to cancel the order for an anchor handling tug and supply vessel worth US$29.5 million is a prudent move given the group's tight cashflow this year, says a research house.

Petra Perdana announced yesterday it has cancelled the order for the 12,240bhp (brake horse-power) ship from shipbuilder Nam Cheong Dockyard Sdn Bhd.

"Taking on more vessels will only stress the group financially, no matter how it is financed," said ECM Libra Investment Research.

A new vessel sitting idle will only be eating into earnings, it said in a research note.

Meanwhile, MIDF Research said lower utilisation rates and possibility of low drilling activities were the reasons for the cancellation.

"However, we are of the opinion that the decision was hugely attributed to Petra's financial feasibility, having to cope with higher commitments and rising debt levels amid weaker vessel utilisation rates.

"Currently, we believe Petra's utilisation rates are around 60 per cent," said the research house in a statement.

MIMB Investment Bank said Petra Perdana recently took delivery of two vessels, namely "Petra Superior" (work barge) and Petra Marathon, which are currently under mobilisation.

With the delivery of another work barge, "Petra Odyssey", in December, will mark the end of Petra Perdana's four-year fleet expansion programme.