Coastal Contracts at record high

by **Cals** Mon 17 Mar 2014, 17:16

Published: Monday March 17, 2014 MYT 4:49:00 PM
Updated: Monday March 17, 2014 MYT 4:52:13 PM
[size=40]Coastal Contracts at record high[/size]

KUALA LUMPUR: Shares of Coastal Contracts surged to an all-time high of RM5.04 on Monday as investors chased up the stock on good earnings visibility.
At 4.40pm, it was up 25 sen to RM5.02. There were 2.70 million shares done at prices ranging from RM4.72 to RM5.04.
The FBM KLCI rose 7.16 points to 1,812.28. Turnover was 1.17 billion shares valued at RM1.32bil. There were 264 gainers, 479 losers and 318 counters unchanged.
UOB Kay Hian Malaysia Research said Coastal Contracts was raising funds to beef up it financial capability to undertake more projects.
It said Coastal Contracts had previously announced that it will undertake a private placement of up to 10% of its issued and paid-up share capital. The issue price of placement shares will be determined at a later date pending the receipt of approval.
"Management expects the placement to be done in the near term (within three months) and intends to use the proceeds to fund the purchase of its US$200mil jack-up and other working capital purpose," it said.
"In 2013, Coastal Contracts secured vessel orders of RM1.35bil, which is a new record for the group and nearly double of 2012's RM698m. With the recent charter wins, Coastal's orderbook stands at a healthy RM2.5bil (Offshore support vessels arm: about RM1.1bil), providing strong earnings visibility," it said.
As at end-December 2013, Coastal Contracts was in a net cash position of RM303mil, higher than the RM208mil in 2012.
"Coastal is expected to turn into a net gearing (net debt/equity) of about 0.2 times by end 2014 with the expected acquisition of the jack-up drilling rig. This is still lower than industry peer's average of 0.45 times," it said.