Alam Maritim bags Sarawak contract, outperforms peers
Borneo Post December 30, 2011, FridayKUCHING: Alam Maritim Resources Bhd (Alam Maritim) is outperforming other public-listed offshore vessel operators in term of new contracts and quarterly earnings performance.
In the second quarter of financial year 2011 (2QFY11), the company chalked up a net profit of RM7 million, making further improvement in 3QFY11 with a net profit of RM13.4 million on the back of better vessel utilisation.
Elaborating on this trend, OSK Research Sdn Bhd (OSK Research) remarked, “We believe that about 50 per cent of Alam Maritim’s vessels are now on long-term charters averaging about a year while the balance 50 per cent are on spot charter.
“Athough its utilisation rate fluctuates monthly, we understand that on average it is still hovering at 60 to 80 per cent.
“Judging from the industry’s current operating environment, we believe this rate is reasonable in view of the fact that Petronas and its production sharing contractors and still handing out minimal new vessel contracts.”
Alam Maritim also announced that its wholly-owned subsidiary, Alam Maritim (M) Sdn Bhd, recently received an award from Sarawak Shell Bhd for the E8 and F13K modules offshore transportation and installation contract estimated at RM29.8 million.
The non-renewable contract which would be for a period of nine months, commenced in 4Q11 and was expected to be completed by May 2012.
The research house was positive on the development but no change to Alam’s FY11 and FY12 earnings, rationalising, “This is because we had earlier assumed that the company would secure some jobs to replenish its orderbook. The contract amount is also not substantial, making up only about 15 per cent of Alam’s total revenue.
“Although we think the group is out-performing its peers, this development has been partly factored into its share price valuation,” OSK Research stated, keeping its fair value for Alam unchanged at RM0.85 per share, based on the existing price earnings ratio of 12 times FY12 earnings per share.