POSITIVE OUTLOOK: HwangDBS Research maintains its earnings forecast and ‘buy’ call on Alam Maritim Resources with a RM1 target price, implying a 37 per cent upside potential.
KUALA LUMPUR: HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) is positive on the latest long-term contract awarded by ExxonMobil Exploration and Production Malaysia Inc to Alam Maritim Resources Bhd.
The RM220.8 million contract was for the chartering of an accommodation vessel and a Anchor Handling Tug.
The contract came with a three-year firm period and an extension option of another two years.
“We are positive over this latest long-term contract which is estimated to contribute RM44 million per annum, as it is likely to maintain its current high fleet utilisation,” the research firm said in a statement yesterday.
HwangDBS Research was also maintaining its earnings forecast and ‘buy’ call on Alam Maritim Resources with a RM1 target price, implying a 37 per cent upside potential.
It also said that financial year 2012 will be the company’s year to showcase its strong earnings visibility, driven by high vessel demand and more installation jobs.
Meanwhile, HwangDBS Research was neutral on shipbuilder Boustead Heavy Industries Corp Bhd’s (BHIC) proposal, to dispose of its 60 per cent stake in PSC Tema Shipyard Ltd to the government of Ghana, given the minimal earnings impact from it.
“We understand that the yard is only breaking even while its total investment in the yard (including acquisition cost) is estimated at RM8 million since the joint venture agreement signed back in 1996.
“There is no mention on the potential amount to be recouped by BHIC but we expect the amount to be similar to its total investment amount or higher pending negotiations on the proposed disposal,” it said. — Bernama