SapCrest registers RM72 mln profit, positive outlook with orderbook

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KUCHING: SapuraCrest Petroleum Bhd (SapCrest), a major oil and gas player recorded a net profit of RM72.3 million for the first quarter of financial year 2012 (1Q12), further solidifying its place in the industry at the national and international levels.

In their respective analyses, AmResearch Sdn Bhd (AmResearch), the research arm of Kenanga Investment Bank Bhd (Kenanga Research) and RHB Research Institute Sdn Bhd (RHB Research) had positive expectations in the future outlook of the company.

The net profit on the back of RM550.8 million revenue and RM125 pre-tax profit was within consensus expectations (25 per cent), rising 43 per cent year-on-year (y-o-y).

However, according to AmResearch, the net profit was “flat quarter-on-quarter (q-o-q) as the higher seasonal drilling earnings before interest and tax (EBIT) of RM79 million (up 69 per cent q-o-q) was mostly offset by a higher minority charge for the tender rig operations.”

AmResearch opined, “We are positive about SapCrest’s recent acquisition of a 50 per cent stake in Labuan Shipyard and Engineering Sdn Bhd (LSE) from Real Mild Sdn Bhd for RM25 million cash.

AmResearch deduced that this would provide the missing fabrication link to SapCrest’s suite of services, which currently include offshore installation works, pipe-lay, drilling, marine spread and operation and maintenance services.

Kenanga Research further asserted the group’s position by stating, “We believe marine division will recover with increase in activities in Berantai field and Yetagun operation which commence in the fourth quarter of calendar year 2011.

“More contract flow is expected in the second half of calendar year 2011 from both domestic and international market to drive earnings growth forward,” the research arm added.

It was understood that the group might be planning to build two new DP3 derrick-lay barges with crane capacities of 1,200 tonnes and 3,500 tonnes, which would cost US$220 million and US$320 million, respectively.

If the group secured a pipe-lay job from Brazil’s tender of six packages this year, it might be building another pipe-lay vessel worth US$400 million.

RHB Research pointed out the huge potential in SapCrest’s orderbook, “In the near term, earnings will be sustained by the significant order book which as at April stood at RM8.6 billion.”

“We continue to believe the stock will be one of the main beneficiaries of the heightened domestic contract flows given its stronghold on the domestic pipe-laying market.

“Moreover, its asset expansions will provide it with the long-term capacity for earnings growth.” RHB Research concluded.

In wrapping up their respective reports, the research houses pegged fair values of SapCrest with AmResearch at RM4.75 per share and RHB Research at RM4.80 per share.

Kenanga Research derived a target price of RM5.21 per share.KUCHING: SapuraCrest Petroleum Bhd (SapCrest), a major oil and gas player recorded a net profit of RM72.3 million for the first quarter of financial year 2012 (1Q12), further solidifying its place in the industry at the national and international levels.

In their respective analyses, AmResearch Sdn Bhd (AmResearch), the research arm of Kenanga Investment Bank Bhd (Kenanga Research) and RHB Research Institute Sdn Bhd (RHB Research) had positive expectations in the future outlook of the company.

The net profit on the back of RM550.8 million revenue and RM125 pre-tax profit was within consensus expectations (25 per cent), rising 43 per cent year-on-year (y-o-y).

However, according to AmResearch, the net profit was “flat quarter-on-quarter (q-o-q) as the higher seasonal drilling earnings before interest and tax (EBIT) of RM79 million (up 69 per cent q-o-q) was mostly offset by a higher minority charge for the tender rig operations.”

AmResearch opined, “We are positive about SapCrest’s recent acquisition of a 50 per cent stake in Labuan Shipyard and Engineering Sdn Bhd (LSE) from Real Mild Sdn Bhd for RM25 million cash.

AmResearch deduced that this would provide the missing fabrication link to SapCrest’s suite of services, which currently include offshore installation works, pipe-lay, drilling, marine spread and operation and maintenance services.

Kenanga Research further asserted the group’s position by stating, “We believe marine division will recover with increase in activities in Berantai field and Yetagun operation which commence in the fourth quarter of calendar year 2011.

“More contract flow is expected in the second half of calendar year 2011 from both domestic and international market to drive earnings growth forward,” the research firm added.

It was understood that the group might be planning to build two new DP3 derrick-lay barges with crane capacities of 1,200 tonnes and 3,500 tonnes, which would cost US$220 million and US$320 million, respectively.

If the group secured a pipe-lay job from Brazil’s tender of six packages this year, it might be building another pipe-lay vessel worth US$400 million.

RHB Research pointed out the huge potential in SapCrest’s orderbook. “In the near term, earnings will be sustained by the significant order book which as at April stood at RM8.6 billion.”

“We continue to believe the stock will be one of the main beneficiaries of the heightened domestic contract flows given its stronghold on the domestic pipe-laying market.

“Moreover, its asset expansions will provide it with the long-term capacity for earnings growth,” it concluded.

In wrapping up their respective reports, the research houses pegged fair values of SapCrest with AmResearch at RM4.75 per share and RHB Research at RM4.80 per share.

Kenanga Research derived a target price of RM5.21 per share.