Period 1Q12
Actual vs. Expectations
Uzma Bhd’s (“UZMA”)
1Q12 net profit of RM4.8m was in line and made up 21% and 22% of the street’s
estimate and our forecast of RM22.9m and RM22.0m respectively. The profitable
quarter was due to the group’s business units posting a better gross profit
margin.
Dividends No
dividend was declared as expected.
Key Results Highlights
QoQ, the 1Q12 revenue
contracted by 9.0% to RM55.3m from RM60.9m, solely due to lower contributions
from Geoscience & Petroleum Engineering Services (GPE) and Wireline
Services (Wireline). However, the quarter net earnings rose by 23%, thanks to
its newly-acquired jointly controlled entities – Setagap Venture Petroleum (SVP),
which generated a RM1.0m profit. Additionally, tax expenses were RM1.0m lower than
the preceding quarter of RM2.3m.
YoY, the 1Q12 net
income surged sharply by 142% to RM4.8m from RM2.0m a year ago. This was on the
back of a 57% hike in revenue to RM55.3m from RM35.1 in 1Q11. This was especially
so for Manpower Services (Manpower),
which contributed the highest revenue improvement by adding RM15.3m.
Outlook We are
anticipating a stronger 2H12 as two additions of UzmAPRES (6th and 7th units) are on track to be deployed in 1-2
months time.
Besides, SVP is also
set to deliver positive earnings to the group as Uzma is expanding its core
business into Coiled Tubing Unit (CTU) in Wireline.
Change to Forecasts
Maintaining our FY12E
net income of RM22.0m.
We are introducing
FY13-14E net income of RM30.0m and RM34.0m, which will be supported by 1) the
group’s flagship product – UzmAPRES, 2) the 5-year Wireline contract from
Petronas Carigali S/B and 3) the new income stream from SVP.
Rating MAINTAIN OUTPERFORM
Valuation We
have rolled over our valuation base to CY13 from CY12. As such, we are
upgrading our target price to RM2.55 from RM2.20 based on 7.5x PER of CY13
earnings. The target PER is at 50% discount to our Oil & Gas sector’s PER
of 15x as Uzma is a small cap player in the sector.
Risks Delays
in the deployment of its upcoming UzmAPRES units due to client’s requests.
Source: Kenanga
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