• Overview. Despite a slow start in 1H21, Hibiscus ended FY21 in a better shape thanks to recovery in oil price. 4QFY21 core PATAMI rose 79% qoq to RM53m as revenue increased by 17% to RM253m due to higher average realised oil price (up +19% qoq to USD69.3/bbl from USD58.4/bbl in 3QFY21). Meanwhile, oil sales volume was largely flat at 863k bbls (3QFY21: 875k bbls).

• Yoy comparison. Stronger earnings in 2HFY21 had contributed to stronger full year FY21 earnings which grew by 23% yoy to RM108m. FY21 oil sales volume rose by 41% yoy to 3.7m bbls which was underpinned by a deferred oil cargo in 4QFY20 due to low oil price. This had more than offset the impact of lower average oil price which declined by 11% yoy to USD51.8/bbl.

• Key highlights. Average daily oil production declined 14% qoq to 7,786 bpd (3QFY21: 9,041 bpd) dragged by lower uptime due to planned turnaround activities at Anasuria. Subsequently, Anasuria production was also impacted by faulty risers during the restart of the FPSO facility.

• Against estimates: Inline. Full year FY21 core PATAMI of RM108m was within our estimate, making up 107% of our full year forecast, but exceed consensus’ estimate at 119%.

• Outlook. Earnings outlook remain exciting mainly driven by the potential consolidation of Repsol Malaysia result possibly in 2HFY22. The company is set to complete the transaction by end of CY2021 and it is possibly raising some debts to satisfy the purchase consideration. The CRPS proceeds could then be utilised for another large producing assets that it is eyeing for.

• Our call. Maintain BUY with an unchanged TP of RM1.20 as we peg 1.3x P/B to its FY22F book value. This is equivalent to +1SD to its 5- year forward P/B. We think this is fair as the company is in asset acquisition drive amidst foreign PSC leaving the country.

Source: BIMB Securities Research - 27 Aug 2021