Hot Stock Deleum rises 6% on brighter prospects

by **Cals** Mon 17 Mar 2014, 17:07

Hot Stock Deleum rises 6% on brighter prospects

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 17 March 2014 16:38

KUALA LUMPUR (Mar 17): Deleum Bhd’s share price rose on Monday after the company said it expects to post double digit growth in earnings and revenue in FY14.

At 4.30 pm, Deleum was traded at RM6.16, up 33 sen or 5.7% with some 595,200 shares done. The stock was one of the top gainers on the exchange.

The Edge Financial Daily today reported that Deleum aimed to achieve its growth target by winning some of the RM700 million worth of local jobs it is bidding for.

The oil and gas (O&G) services provider posted an 11% increase in net profit to RM49.56 million for the financial year ended Dec 31, 2013 (FY13) from RM44.5 million a year ago. This was achieved on revenue of RM484.7 million, up 2% from RM473.2 million in FY12.

Nan Yusri Nan Rahimi, group managing director of Deleum, was quoted by the daily as saying the company was bidding for projects from 16 O&G operators.

Although the group aims to go regional in 2015, he said that the majority of jobs will remain within local shores as Malaysia and Petroliam Nasional Bhd (Petronas) have more to offer.

Deleum presently has a RM3.3 billion order book, which will keep it busy until 2022.

Besides that, Deleum had also proposed a bonus issue and a share split to reward its shareholders and improve trading liquidity while making its shares affordable.

In a statement to the bourse last week, Deleum announced a one-for-three bonus issue of 50 million new shares and a one-into-two share split, subdividing every RM1.00 ordinary share into two shares of 50 sen each.

Alliance IB Research analyst Arnhue Tan said in a note that the proposals could positively affect Deleum’s share price.

“We view that the proposals positively as it could raise retail trading interest in the stock, thus potentially improving liquidity,” she said.