KUALA LUMPUR: Phillip Capital Research is positive on Uzma Bhd
’s latest contract win from PTTEP Sarawak Oil Ltd.
Uzma said the scope of works comprises the provision of HWU equipment and services for PTTEP’s workover campaign on two platforms offshore Sabah and Sarawak.
The upstream oil and gas services provider did not provide the value of the contract.
“While no official value was disclosed, we estimate the contract value to be circa RM20mil implying circa RM3mil value for each well,” Phillip Capital said in a report.
It noted that the duration of the contract was not specified, as it depends on the time required to complete each well, which varies based on the structural complexity of the wells.
“Assuming Uzma completes the six wells in FY25 with a group blended Patami margin of 8–9%, we estimate this contract to contribute circa RM2mil net profit, accounting for 3% of our existing FY25 profit forecasts.
“We understand that four out of eight HWUs will be operational with this contract win. Including this contract, the year-to-date cumulative contract win amounts to c.RM730mil, adding to its robust order book of RM2.8bil providing strong earnings visibility over the next three years,” Phillip Capital said.
The research house anticipates that strong contract flow momentum will continue in 2HCY24, bolstered by rising domestic brownfield activities and a substantial RM3.6bil tender book.
“We reiterate our ‘buy’ rating and RM1.78 target price based on an unchanged 12x PE multiple on FY25E EPS. Risks to our buy call include lower-than-expected work orders from customers, unforeseen project delays, and escalation in project execution cost,” it added.
Uzma added one sen, or 0.99% to RM1.02 at 10.25 am. The counter has appreciated 36% so far this year.
