Garuda wings Perisai to a record quarter

Business & Markets 2013
Written by CIMB Research
Friday, 10 May 2013 10:54
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PERISAI PETROLEUM TEKNOLOGI [] Bhd
(May 9, RM1.38)
Maintain outperform at RM1.27 with a revised target price of
RM1.90 (from RM1.63): Perisai was off to a flying start in the first
quarter of 2013 financial year ending December (1QFY13). It was its
best quarter ever thanks to Garuda Energy (L) Ltd’s mobile operating
production unit (MOPU). At 20% of our full-year forecast and 22% of
consensus, 1Q net profit was broadly in line with expectations. Expect
FY13 to be a new record year as floating production, storage and
offloading (FPSO) contributions kick in.
Our target price rises as we now value the stock at our revised 2014
calendar year target market price-earnings ratio of 15.6 times, up from
13.3 times previously. Perisai remains an “outperform” and our top small
cap oil and gas pick.
Perisai posted a record 1Q net profit of RM23.7 million, up 1.6%
year-on-year (y-o-y). This record performance was supported by
Garuda, which completed the acquisition of a MOPU in January last
year. The MOPU contributed 40% to group revenue and 46% to pre-tax
profit.
This is set to be a new record year, mostly due to contributions from
FPSO operations. FPSO vessel Lewek Arunothai is expected to reach
the Kamelia field in the North Malay Basin in mid-2013 to service Hess
E&P Malaysia’s US$272 million (RM808 million) contract, with July 22
being the target date for first gas.
Perisai’s first jack-up rig, Perisai Pacific 101, is scheduled to be delivered in July next year, while the second rig is expected
to arrive in 2QFY15. The company has yet to secure contracts for the rigs. Assuming: (i) a daily charter rate of US$150,000;
(ii) a 25% net margin; and (iii) an exchange rate of RM3; one rig could add RM41 million to Perisai’s net profit per year. Thus,
the company is expected to achieve substantially stronger growth from FY14 onwards. — CIMB Research, May 9