March 1, 2011

ALAM - OSK Research: Alam Maritim results below expectations, TP unchanged RM1.50

Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Research House: OSK

KUALA LUMPUR: OSK Research said Alam Maritim's FY10 results were below expectation due to the provision made for doubtful debts, especially those related to Vastalux.

It said on Tuesday, March 1 that Alam Maritim's performance was also affected by soft vessel demand and continuously poor contribution from its underwater services and offshore installation and CONSTRUCTION [] divisions.

'However, we believe Alam has fully provided for the potential doubtful debt amount arising from Vastalux and going forward, we see more O&G activities pick up pace, which will spur demand for its vessels,' it said.

OSK Research said its target price for Alam remained unchanged at RM1.50, based on the existing PER of 15x FY11 EPS.

'We believe the company's outlook should brighten going forward since Alam has fully provided for Vastalux's potential doubtful debt. We also expect the pace of O&G activities to pick up as the projects awarded last year and early this year are progressively implemented,' it said.

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