PERISAI (0047) - Perisai Petroleum - The search is on
Target RM0.61 (Stock Rating: REDUCE)
Perisai’s FY14 core net profit tumbled 90% yoy to RM7m as the company grapples with two idle assets – Rubicone and E3. The core net profit was 94% above our forecast due to a lower tax rate, but it was 42% below consensus. We do not anticipate any exciting catalysts, at least until mid-2015, as management scouts for contracts for Rubicone, E3 and the under-construction PP102. Our target price drops marginally as we trim our FY15-16 EPS on lower revenue assumptions for Intan’s vessels. We continue to value the stock at 10.5x CY16 P/E, still at a 30% discount to the oil & gas big caps. Maintain Reduce with a potential de-rating catalyst being a prolonged contract search for the three assets. Switch to our top oil & gas small-cap pick Perdana.
90% fall in FY14 core net profit
Excluding RM3m vessel disposal gain and RM3.7m forex gain, Perisai ended a challenging FY14 with a core net profit of RM7m (-90% yoy), due to the idling of mobile offshore production unit (MOPU) Rubicone and pipelay barge E3 since 1 Oct 2013. The deployment of jack-up PP101 in Aug 2014 softened the blow, helping Perisai to end FY14 in the black. Its 51%-owned floating production, storage and offloading (FPSO) vessel Perisai Kamelia, which started production in Nov 2013, chipped in as well. The absence of a dividend payment was expected.
Three assets yet to be contracted
We removed Rubicone and E3 from our forecasts in Dec 2014 as management continues to look for contracts for these two assets, as well as for PP102, which is slated for delivery in Apr/May 2015. Our forecasts include only these assets: PP101 and PP102, Perisai Kamelia and various offshore support vessels under Intan. Adding back Rubicone and E3 into our forecasts in 2H15 would boost our EPS by 81% for FY15 and 84% for FY16.
Rubicone for PM9?
We understand that Rubicone has been earmarked for work at the PM9 gas field in offshore Terengganu. The MOPU is suitable for the job because it has gas facilities. However, a decision on the operatorship of PM9 has been delayed for more than a year and we understand that the earliest a decision will be made is in mid-2015.
Source: CIMB Daybreak - 26 February 2015
Target RM0.61 (Stock Rating: REDUCE)
Perisai’s FY14 core net profit tumbled 90% yoy to RM7m as the company grapples with two idle assets – Rubicone and E3. The core net profit was 94% above our forecast due to a lower tax rate, but it was 42% below consensus. We do not anticipate any exciting catalysts, at least until mid-2015, as management scouts for contracts for Rubicone, E3 and the under-construction PP102. Our target price drops marginally as we trim our FY15-16 EPS on lower revenue assumptions for Intan’s vessels. We continue to value the stock at 10.5x CY16 P/E, still at a 30% discount to the oil & gas big caps. Maintain Reduce with a potential de-rating catalyst being a prolonged contract search for the three assets. Switch to our top oil & gas small-cap pick Perdana.
90% fall in FY14 core net profit
Excluding RM3m vessel disposal gain and RM3.7m forex gain, Perisai ended a challenging FY14 with a core net profit of RM7m (-90% yoy), due to the idling of mobile offshore production unit (MOPU) Rubicone and pipelay barge E3 since 1 Oct 2013. The deployment of jack-up PP101 in Aug 2014 softened the blow, helping Perisai to end FY14 in the black. Its 51%-owned floating production, storage and offloading (FPSO) vessel Perisai Kamelia, which started production in Nov 2013, chipped in as well. The absence of a dividend payment was expected.
Three assets yet to be contracted
We removed Rubicone and E3 from our forecasts in Dec 2014 as management continues to look for contracts for these two assets, as well as for PP102, which is slated for delivery in Apr/May 2015. Our forecasts include only these assets: PP101 and PP102, Perisai Kamelia and various offshore support vessels under Intan. Adding back Rubicone and E3 into our forecasts in 2H15 would boost our EPS by 81% for FY15 and 84% for FY16.
Rubicone for PM9?
We understand that Rubicone has been earmarked for work at the PM9 gas field in offshore Terengganu. The MOPU is suitable for the job because it has gas facilities. However, a decision on the operatorship of PM9 has been delayed for more than a year and we understand that the earliest a decision will be made is in mid-2015.
Source: CIMB Daybreak - 26 February 2015
