Perisai awaiting new contracts

Business & Markets 2013
Written by Alliance IB Research
Friday, 15 November 2013 10:21
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Perisai Petroleum Teknologi Bhd
(Nov 14, RM1.43)
Maintain neutral at RM1.42 with a target price of RM1.36: Perisai reported
core net profit for the third quarter ended September of 2013 financial year
(3QFY13) of RM23.4 million (+13% year-on-year [y-o-y], +18.4% quarteron-
quarter [q-o-q]) and RM71.2 million (+10.8% y-o-y) for the first nine months
(9M).
Earnings made up 95% of full-year estimates and 81% of consensus estimates.
We deem the results to be above house expectations but within consensus.
The 4QFY13 is expected to be weaker as Enterprise 3 and Rubicone mobile
offshore production unit (Mopu) have completed their charters.
Results were above our expectations as we had not accounted for the
Malaysian Financial Reporting Standards (MFRS) 5 “non-current assets held
for sale and discontinued operations” which prescribes that no depreciation is
required for assets being held for sale. As such, the earnings from the
Enterprise 3 were higher than expected during the 9MFY13 period.
Revenue was largely flattish for the 9MFY13 period (+1.3% y-o-y) as there was
no change to the group’s asset base during the period and no change to
charters of the Intan offshore vessels and Rubicone Mopu.
Core net profit was up 10.8% y-o-y as there was a higher contribution from the
Enterprise 3 as explained above.
We remain cautious going into 4QFY13 and FY14 as Enterprise 3 and
Rubicone Mopu have ended their term charters in September. These two
assets contribute more than 60% of FY13 earnings and 30% of FY14 earnings. As such, new contracts for these assets are crucial at this
juncture.
Helping to buoy earnings in the interim will be the floating production, storage and offloading (FPSO) vessel Kamelia, which has begun its
production work in the North Malay Basin for a charter of US$250,000 (RM797,500) per day.
To recap, we have factored into our earnings estimates a break in the charter of Enterprise 3 and Rubicone Mopu for a nine-month period
starting October 2013. We understand the group is actively tendering for work and hope contracts will materialise soon.
The group was reportedly bidding to secure the PM-9 matured field development with Talisman as its partner. However, few details on the
extent of Perisai’s involvement are available at this juncture but we understand it hopes to deploy Robicone Mopu to work at the field.
We adjust our FY13 estimates to account for higher contribution from Enterprise 3 due to the MFRS 5. As such, we raise FY13 earnings
per share (EPS) by 11.1%.
Our target price of RM1.36 remains unchanged as it is based on FY14 EPS, pegging an industry (small to mid cap oil and gas peers)
mid-cycle price-earnings ratio of 11.7 times. We maintain “neutral” on Perisai at this juncture as the group is awaiting crucial new contracts
for Enterprise 3 and Rubicone Mopu. It is also awaiting contracts for Perisai Pacific 101 jack-up drilling rig which will be delivered by the
end of the first half of FY14. — Alliance IB Research, Nov 14