Overview. Hibiscus 1QFY22 core PATAMI rose >100% yoy to RM42m mainly boosted by higher oil price. Revenue increased 70% yoy to RM247m as average realised oil price was +87% higher at USD75.3/bbl (1QFY21: USD40.2/bbl) which more than offset the decline in oil sales volume by 10% at 757k bbls (1QFY21: 843k bbls). On qoq basis, earnings was 21% weaker due to lower sales volume.

Key highlights. Average daily oil production declined 7% qoq and 20% yoy to 7,215 bpd dragged by lower uptime at North Sabah. The production was affected by extended outages due to contractor’s logistical constraint in compliance with Covid-19 SOP. Meanwhile, production at Anasuria remains subdued as the faulty subsea components will only be rectified in 3QCY2022.

Against estimates: Inline. 3MFY22 core PATAMI made up 19% of our full year FY2022 estimate. We deem this as within our FY22 estimate as we have already included potential contribution from Repsol’s asset in our estimate.

Outlook. The company is on track to complete the acquisition of Repsol Malaysia by end of CY2021 and it may start to consolidate the results by 3QFY22.

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 - 11 Nov 2021