Alam Maritim’s (Alam) 9MFY12 results were above our expectations but within consensus numbers, making up 90.1% and 76.2% of both full-year estimates respectively. Revenue soared 53.5% y-o-y, boosted by revenue contribution from its offshore, installation and construction (OIC) division. We remain positive on the recovery in Alam’s business but are cautious on its OIC and subsea business due to the absence of contracts for next year. Maintain BUY, with an unchanged FV of RM1.25, pegged to 13x FY13 EPS.
Within expectations. Alam’s 9MFY12 net profit made up 90.1% of our expectations and 76.2% of consensus estimates. Revenue grew 53.3% y-o-y, underpinned by stronger contributions from its OIC business (supported by the company’s current OIC contracts with Sabah Oil & Gas Terminal and Samsung Engineering Malaysia). Meanwhile, net profit soared 185.7% y-o-y, mainly due to improving charter rates and the increase in the share of profits from its associates and jointly controlled entities. However, compared with the preceding quarter, revenue dropped 28.8% due to lower revenue registered by its OIC and subsea division but net profit dipped only by 4.0% due to better margins recorded from its OSV division.
Raising FY12 earnings estimate by 7.7%. Incorporating its strong earnings in 3QFY12, we are raising our FY12 earnings forecast by 7.7% and expect 4Q to be weaker due to it falling in the monsoon season, but are leaving our earnings estimates for FY13 unchanged for now and will closely follow the developments of the company’s OIC and subsea business. Other catalysts include other marginal oilfield and brownfield services contracts, which have yet to be awarded this year. Once the contracts have been dished out, we believe that vessel services will be required, thereby benefiting players such as Alam Maritim.
Maintain BUY. We remain positive on the recovery of Alam's OSV business for 2013, which would contribute positively to the group’s bottom-line, but remain cautious on its OIC and subsea businesses due to the lack of any contracts to keep both divisions afloat at this point in time. We are maintaining our FV at RM1.25, pegged to 13x FY13 EPS.
Within expectations. Alam’s 9MFY12 net profit made up 90.1% of our expectations and 76.2% of consensus estimates. Revenue grew 53.3% y-o-y, underpinned by stronger contributions from its OIC business (supported by the company’s current OIC contracts with Sabah Oil & Gas Terminal and Samsung Engineering Malaysia). Meanwhile, net profit soared 185.7% y-o-y, mainly due to improving charter rates and the increase in the share of profits from its associates and jointly controlled entities. However, compared with the preceding quarter, revenue dropped 28.8% due to lower revenue registered by its OIC and subsea division but net profit dipped only by 4.0% due to better margins recorded from its OSV division.
Raising FY12 earnings estimate by 7.7%. Incorporating its strong earnings in 3QFY12, we are raising our FY12 earnings forecast by 7.7% and expect 4Q to be weaker due to it falling in the monsoon season, but are leaving our earnings estimates for FY13 unchanged for now and will closely follow the developments of the company’s OIC and subsea business. Other catalysts include other marginal oilfield and brownfield services contracts, which have yet to be awarded this year. Once the contracts have been dished out, we believe that vessel services will be required, thereby benefiting players such as Alam Maritim.
Maintain BUY. We remain positive on the recovery of Alam's OSV business for 2013, which would contribute positively to the group’s bottom-line, but remain cautious on its OIC and subsea businesses due to the lack of any contracts to keep both divisions afloat at this point in time. We are maintaining our FV at RM1.25, pegged to 13x FY13 EPS.
Source: OSK
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