THE BUZZ
Alam Maritim Resources’ (Alam) jointly controlled entity, Alam Swiber DLB (L) Inc has secured an agreement with Newcruz Offshore Marine Pte Ltd for the charter of a pipelay barge identified as 1MAS-300. The deal is worth RM18m.
OUR TAKE
Positive but no changes to our earnings forecast. The contract is valued at approximately RM18m for a firm charter of 175 days only, commencing by the third week of October 2012. We are making no changes to our earnings estimate as we had earlier assumed some job replenishments for Alam’s pipelay barge and associated vessels.
Turnaround prospects intact. Including yesterday’s contract, Alam has already secured three contracts worth RM137m in a short span of three months since August. We continue to believe that the company’s turnaround prospects could be intact
provided that it could i) continue to secure new contracts and improve the execution of its operations, and iii) strengthen its earnings track record in the coming quarters. Moving forward, we expect more projects to be handed out to Alam in the next six months in anticipation of more activities in the oil and gas sector (O&G) next year.
Maintain BUY. In line with our overweight call on the O&G sector, we believe that Alam’s valuations could rerate towards 10-12x forward earnings if it is able to improve its earnings track record in the coming quarters. Despite making no changes to our earnings estimate, we are revising our fair value upwards to RM1.25 as we rollover our valuations to 12x FY13 earnings. Maintain BUY.
Source: OSK
No comments:
Post a Comment