• Over the October – December 2015 period (financial year-end has changed to June, from December), Coastal Contracts Bhd has recorded a net profit and revenue of RM13.3 mln and RM173.6 mln respectively vs. our forecast of RM32.1 mln and RM368.3 mln respectively. The decline in earnings was due to lower vessels delivery during the aforementioned period (two units) vs. five units delivered in 4Q2014 and seven units delivered in 3Q2015.
• For the 12-months ended 31st December 2015, the company recorded a cumulative net profit of RM137.6 mln, which was also below our expectations as it only accounts for 75.0% of our forecast of RM183.7 mln. Revenue for the period, meanwhile, stood at RM1.61 bln, which accounts to 76.5% of our expected RM2.1 bln – which is again below our expectations.
• Despite the slowdown in the O&G industry, the company still managed to grow its reserves by 10.8% Y.o.Y to RM1.10 bln in 4Q2015 vs. RM989.6 mln in 4Q2014. Its net asset also grew to RM3.29 per share (from RM2.69 per share), which translates into a Y.o.Y growth of 22.3%, mainly attributable to the addition of its second JU rig into its books.
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Source: M+ Online Research - 8 Mar 2016