Monday, 7 January 2013

PERDANA (FV RM1.17 – NEUTRAL) Corporate News Flash: Lands Two Contracts Worth RM70m

Perdana Petroleum last Friday announced on Bursa Malaysia that its wholly-ownedsubsidiaries,  Intra  Oil  Services  and  Perdana  Marine  Offshore  Pte  Ltd,  have  beenawarded  two  contracts  worth  a  total  of  approximately  RM70.0m  (excluding  the extension options). 
 
Contracts  worth  RM70.0m  in  total.  The  contracts  are  i)  the  provision  of  a  workboat  to Alam Maritim (AMRB MK, BUY FV RM1.25) for nine months commencing 4 Jan 2013, with an  extension  option  for  one  year,  ii)  the  provision  of  a  workbarge  to  Ibnusina  Resources SB for 21 months commencing 15 Feb 2013, with an extension option of three months. 
 
Alam Maritim switches to Perdana Petroleum’s workboat. Alam Maritim had on 11 Oct 2012  announced  that  it  had  accepted  the  award  from  a  local  oil  &  gas  company  for  the provision of one unit of workboat for a year with an extension option for another year, and it had  acted  as  a  broker  for  the  deal. We gather from Alam’s management that it  chose  to charter  Perdana  Petroleum’s  workboat  instead  and  terminated  the  charter  from  the previous third party due to the more favourable charter rate offered by Perdana Petroleum.  
 
Positive news but no changes to our earnings forecast. This is because we had earlier factored in some orderbook replenishment for its vessels.  
 
Downgrade  to  NEUTRAL.  As we make no changes to our FY13 forecasts, our fair value remains  unchanged  at  RM1.17,  pegged  to  12x  FY13  EPS.  Nonetheless,  we  downgrade the  stock  to  NEUTRAL  from BUY  given  the  limited  upside to  our  fair  value.  Key  re-rating catalysts for the stock include i) Dayang (DEHB MK, BUY FV RM2.90) increasing its stake in the company, and ii) improving charter rates (above USD2.0 per bhp) for its vessels.

Source: OSK

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