PERISAI (0047) : RHB Research downgrades Perisai to Sell from Neutral
KUALA LUMPUR: RHB Research has downgraded Perisai Petroleum to Sell from Neutral with a target price of 88 sen from RM1.46 based on 14.6 times FY15F P/E, a 20% discount to the mid-cap oil and gas stocks under its coverage.
"We lower our earnings for FY14/FY15 by 95%/38% as we take into account the higher financing costs as well as reduce our vessel utilisation assumptions for the two idle vessels," it said in a note on Thursday.
RHB said Perisai's disappointing numbers were due to the under-utilisation of two marine assets and higher finance cost from borrowings.
"Rubicone and Enterprise 3 are still idle, and we estimate that for every month these assets are idle, Perisai will be bleeding out RM2mil in depreciation, manpower as well as yard space rental for each vessel.
"We believe these vessels will not be seeing any action in FY14 and will only be chartered out in FY15. Recall that Perisai will take delivery of two jack-up rigs, Pacific 102 and Pacific 103, in mid FY15 and FY16 respectively," it said.
RHB said these two rigs are still without a contract and taking the current muted outlook of the oil and gas industry into account, it is cautious on Perisai getting a contract for these two rigs on delivery.
"On another note, Perisai’s total borrowings currently stand at RM1.1bil, taking its gearing level to 0.91 time. Management guided that its medium-term notes incurred an interest cost of RM5mil year-to-date," it said.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research has downgraded Perisai Petroleum to Sell from Neutral with a target price of 88 sen from RM1.46 based on 14.6 times FY15F P/E, a 20% discount to the mid-cap oil and gas stocks under its coverage.
"We lower our earnings for FY14/FY15 by 95%/38% as we take into account the higher financing costs as well as reduce our vessel utilisation assumptions for the two idle vessels," it said in a note on Thursday.
RHB said Perisai's disappointing numbers were due to the under-utilisation of two marine assets and higher finance cost from borrowings.
"Rubicone and Enterprise 3 are still idle, and we estimate that for every month these assets are idle, Perisai will be bleeding out RM2mil in depreciation, manpower as well as yard space rental for each vessel.
"We believe these vessels will not be seeing any action in FY14 and will only be chartered out in FY15. Recall that Perisai will take delivery of two jack-up rigs, Pacific 102 and Pacific 103, in mid FY15 and FY16 respectively," it said.
RHB said these two rigs are still without a contract and taking the current muted outlook of the oil and gas industry into account, it is cautious on Perisai getting a contract for these two rigs on delivery.
"On another note, Perisai’s total borrowings currently stand at RM1.1bil, taking its gearing level to 0.91 time. Management guided that its medium-term notes incurred an interest cost of RM5mil year-to-date," it said.
http://www.thestar.com.my
