• Barakah Offshore Petroleum registered a 4Q2015 net profit of RM14.5 mln after accounting for an income tax credit of RM16.0 mln. Excluding the one off adjustments, the company recorded a 4Q2015 pretax loss of RM1.5 mln vs our expected 4Q2015 pretax profit of RM4.4 mln. The downbeat performance was due to slower work flows in 2H2015 and capacity/costs are still running at 2014 levels despite the balance sheet restructuring exercise.
• For 2015, the company recorded a net profit of RM18.8 mln, helped by the tax credits and excluding the income tax credit of RM13.2 mln, its pretax profit of RM5.6 mln would come in below our expectation of RM19.6 mln (accounting to 28.6% of our previous forecast). Revenue for the period, however, came in within our expectation as it stood at RM592.6 mln vs. our expectations of RM564.4 mln.
• Meanwhile, the company has managed to keep its net gearing level at 24.2% as at end of 2015 vs. 13.7% as at end of 2014 owing to the balance sheet restructuring efforts that reduced its working capital requirement needs. However, the higher forex translation losses have reduced its NTA from 43.7 sen to 37.9 sen (-13.3% Y.o.Y), albeit the drop in short term borrowings.

Source: M+ Online Research - 29 Feb 2016