Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Alam Maritim Resources Bhd
(July 27, 93 sen)
Maintain buy at 91 sen with target price of RM1.31: Alam Maritim announced on July 26 that it had secured a short-term charter contract from Petronas Carigali Sdn Bhd for the provision of one AHTS (anchor handling tug supply vessel) for a total sum of RM10.6 million. The contract commenced on July 13, 2011 for a primary period of 150 days with two extension options of 45 days each.
The vessel is not Alam Maritim's own but one'' managed by the group for a third party. The size of the vessel is 10,000 brake horsepower (bhp) and the rate comes up to RM65,000 per day. In terms of bhp per day, we estimate that rates are slightly above US$2 per bhp per day. Given that the vessel is not Alam's own, margins should be lower at'' 5% to 8% at earnings before interest and tax (Ebit) level.
Since April, the group has secured some RM190 million in new contracts. This includes the RM52 million contract for supply of single buoy mooring systems to the Sabah Oil and Gas Terminal (SOGT).
We believe there is more to come from Alam. We understand the group is close to securing the near shore pipe laying job for the SOGT. We believe that there have been other contenders for the job which could be SapuraCrest Petroleum Bhd. That said, Alam's joint venture with Yayasan Sabah is meant to help it gain traction in the Sabah oil and gas (O&G) arena and it may be favoured to win the job.
With new contracts trickling through only in April onwards, 2QFY11 results are expected to be sequentially better (from a loss of RM6.8 million in 1QFY10). We expect'' Alam to at least be able to break even in 2Q. That said, our full-year earnings per share (EPS) of 9.2 sen may need another look, we will issue a report on earnings.
We see Alam in a positive light as the group is turning the corner in terms of earnings. With the jobs already secured this year, we would be hard pressed to see the group making losses for FY11. Vessel demand in the offshore O&G industry is indeed making a slow comeback. A drop off in new vessel deliveries in 2010 onwards will help to tighten the supply of vessels in the market, we believe, and eventually bring charter rates higher next year.
We maintain our 'buy' call and target price (TP) of RM1.31 on Alam Maritim at this juncture. Our TP is premised on a 14 times price-earnings multiple pegging FY11F EPS. ' ECM Libra Research, July 27
This article appeared in The Edge Financial Daily, July 28, 2011.
Company Name: ALAM MARITIM RESOURCES BHD
| Research House: ECMLIBRA | Price Call: BUY | Target Price: 1.31 |
Alam Maritim Resources Bhd
(July 27, 93 sen)
Maintain buy at 91 sen with target price of RM1.31: Alam Maritim announced on July 26 that it had secured a short-term charter contract from Petronas Carigali Sdn Bhd for the provision of one AHTS (anchor handling tug supply vessel) for a total sum of RM10.6 million. The contract commenced on July 13, 2011 for a primary period of 150 days with two extension options of 45 days each.
The vessel is not Alam Maritim's own but one'' managed by the group for a third party. The size of the vessel is 10,000 brake horsepower (bhp) and the rate comes up to RM65,000 per day. In terms of bhp per day, we estimate that rates are slightly above US$2 per bhp per day. Given that the vessel is not Alam's own, margins should be lower at'' 5% to 8% at earnings before interest and tax (Ebit) level.
Since April, the group has secured some RM190 million in new contracts. This includes the RM52 million contract for supply of single buoy mooring systems to the Sabah Oil and Gas Terminal (SOGT).
We believe there is more to come from Alam. We understand the group is close to securing the near shore pipe laying job for the SOGT. We believe that there have been other contenders for the job which could be SapuraCrest Petroleum Bhd. That said, Alam's joint venture with Yayasan Sabah is meant to help it gain traction in the Sabah oil and gas (O&G) arena and it may be favoured to win the job.
With new contracts trickling through only in April onwards, 2QFY11 results are expected to be sequentially better (from a loss of RM6.8 million in 1QFY10). We expect'' Alam to at least be able to break even in 2Q. That said, our full-year earnings per share (EPS) of 9.2 sen may need another look, we will issue a report on earnings.
We see Alam in a positive light as the group is turning the corner in terms of earnings. With the jobs already secured this year, we would be hard pressed to see the group making losses for FY11. Vessel demand in the offshore O&G industry is indeed making a slow comeback. A drop off in new vessel deliveries in 2010 onwards will help to tighten the supply of vessels in the market, we believe, and eventually bring charter rates higher next year.
We maintain our 'buy' call and target price (TP) of RM1.31 on Alam Maritim at this juncture. Our TP is premised on a 14 times price-earnings multiple pegging FY11F EPS. ' ECM Libra Research, July 27
This article appeared in The Edge Financial Daily, July 28, 2011.
Pls write about ECM libra Reasearch in your next post.
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