The AGM puts to rest the corporate entanglement that surfaced in 4Q09. Now that the episode is behind it and with a board of directors in place, management can focus on running the business. We note that sentiment relating to its marine support operations has improved, especially for the 5,000HP AHTS vessels. Petra Perdana?s fleet is growing and the utilisation rate is improving.

Since the 4 Feb EGM, the company has landed four new long-term charters (Petra Ranger, Petra Enterprise, Petra Sovereign and Petra Excelsior), renewed two charters (Petra Adventurer and IOS Elaine) and secured vessel financing packages totaling approximately RM400m. The company will accept delivery of two more vessels by year-end, adding to its current fleet of 25 vessels. The average vessel utilisation rate has risen to around 60%, an improvement on FY09?s 55% (FY08: 85%). With the new vessels to be deployed this year, the utilisation rate is expected to improve to 65%.

We maintain our earnings forecasts and SOP-based target price of RM1.92 Petra Perdana remains an OUTPERFORM, with the re-rating triggers being 1) fleet expansion, and 2) improved vessel utilisation rate.