Friday, 1 March 2013

Alam Maritim - In Need Of a Leg Up

Alam  Maritim’s  (Alam)  FY12  net  profit  came  in  above  our  and  consensus expectations,  due  to  better-than-expected  contributions  from  its  associates  and jointly-controlled entities. We retain our BUY recommendation for now, with the fair value  (FV)  unchanged  at  RM1.25,  pegged  to  13x  FY13  EPS.  The  key  downside  risk lies with its offshore, installation and construction (OIC) and subsea businesses as Alam has  yet to receive any contracts this year, which may lead to a downgrade of their FY13 earnings by end-1Q13.
Above  expectations.  Alam’s  FY12  net  profit  came  in  above  our  and  consensus’ expectations, accounting for 129.9% of our and 117.2% of consensus’ full year estimates. Revenue grew 62.9% y-o-y and 43.5% y-o-y due to a significant increase in contributions
from its OIC business (supported by its contract with Samsung Engineering and Sarawak Shell).  While  the  results  are positive, Alam’s EBIT pluged  42.3%  y-o-y  and  the  company incurred  operational  losses  in  4Q12,  but  was  boosted  by  contributions  from  its  jointly controlled entities and associate companies (+>100% y-o-y and q-o-q). We believe that the operational losses may be attributable to losses from its subsea business.
Source: OSK

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