PETALING JAYA: Uzma Bhd
’s recent contract extension is expected to turn in group blended profit after tax and minority interest margin of about 8%-9%, or about RM8mil-RM9mil.
This accounts for 9% of Phillip Capital Research’s financial year 2025 (FY26) earnings forecast and 5% of its FY26 forecast.
The research house viewed the contract positively as it underscores PETRONAS Carigali Sdn Bhd’s (PCSB) confidence in Uzma’s ability to deliver coiled tubing services reliably, and increases the company’s order book to RM3.1bil.
Uzma, via its subsidiary Setegap Ventures Petroleum Sdn Bhd, secured a RM100mil contract extension from PCSB to provide coiled tubing equipment and services for the latter’s offshore oilfield in East Malaysia.
Phillip Capital Research made no changes to its earnings forecast, as this contract falls within its assumptions.
It expected the company’s strong earnings momentum to continue into FY25, driven by the commencement of Uzma’s LSS4 (large scale solar) project, a pick-up in oil and gas activities, and its sizeable order book.
The research house reiterated its “buy” call with a target price of RM1.45 per share, based on 10 times price-earnings ratio (PE) of FY26 earnings per share.
Uzma is currently trading at an attractive five times forward FY26 PE, it said.
Key risks included lower- than-expected work orders, unforeseen project delays and escalation in project execution costs.
Phillip Capital Research noted that the service rates for this latest extension are comparable to the previous two-year extension, valued at RM230mil.
