Uzma gains 5.4% on contract win

  • Business
  • Thursday, 26 Jul 2018

KUALA LUMPUR: Shares of UZMA BHD gained over 5% in early trade Thursday on winning a five-year umbrella contract from Petronas Carigali Sdn Bhd.

The counter rose six sen, or 5.45% to RM1.16.

Uzma said its wholly-owned subsidiary, Uzma Engineering Sdn Bhd (UESB), has secured the five-year umbrella contract from Petronas Carigali for the provision of drilling fluids and associated services for Petroleum Arrangement Contractors (PACs).

Uzma said there is no firm value for the umbrella contract, as it depends on work orders to be issued to it from time to time at the discretion of PACs.

The tenure of the umbrella contract is five years from the date of the Letter of Award dated May 30, 2018.

PublicInvest is positive on the contract win it proves the group’s ability in expanding its technical capabilities within the sector’s value chain.

The research house maintained its forecast unchanged as it assumed this contract was within its job replenishment target for the year.

“Uzma’s earnings outlook remains intact on the back of an approximate RM1.8bil balance order book in hand coupled with its improved profit margins.

“We thus retain our Outperform rating on Uzma at an unchanged target price of RM1.27 based on a 10x PE multiple to FY19F EPS of 12.7sen,” PublivInvest said.

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