PublicInvest Research said Uzma’s current orderbook was now at around RM2.2bil after it secured works amounting to RM40mil and RM230mil in January 2023.
PETALING JAYA: Job flows are coming back the way of Uzma Bhd
, a positive sign as it reaffirms the outlook for the oil and gas service provider being a key beneficiary of increasing brownfield activities.
On Monday, Uzma received a contract extension from PETRONAS Carigali for the provision of coiled tubing and services for a duration of two years. The contract is valued at RM230mil, which is 15% higher as compared to the previous extension, noted PublicInvest Research.
Earlier to this, the group had bagged a contract from Sarawak Shell for supplying kinetic hydrate inhibitor, corrosion inhibitor and associated services for the Shell Timi Field via its 70% subsidiary, Malaysian Energy Chemical & Services Sdn Bhd.
This contract is worth RM40mil for a duration of five years.
“The upward revision in contract value (for the PETRONAS Carigali one) also signals a more optimistic view on Uzma on the back of stable oil price above US$80 (RM339.80) per barrel. We raise FY23-FY25 forecast earnings per share (EPS) by 12%-15% to account for this contract and assumptions of more contract wins ahead,” said PublicInvest in a note to clients.
The research firm said the contract is a second extension after the first one was awarded in November 2020. Assuming equal revenue recognition and a blended net profit margin of 5.5%, the contract is expected to have a positive impact to its bottom-line amounting to about RM6.4mil per year, it added.
Based on the research firm’s checks, Uzma’s current order book was now at around RM2.2bil after it secured works amounting to RM40mil and RM230mil in January 2023.
