Journey to Wealth
Perdana Petroleum - A Done Deal
Perdana Petroleum (Perdana) informed Bursa Malaysia yesterday that its wholly-owned subsidiary, Petra Offshore Limited (POL), had on 25 Feb 2013 entered into an agreement to dispose of seven old vessels to PT Ninda Vriesindo for a total consideration of USD3.45m.
Putting the worst behind. The vessels, expected to be delivered on 15 Mar 2013, will potentially give rise to operating cost savings of about RM10m-RM12m per annum. As Perdana's management has made a provision of RM27.7m in FY12, this sale should not have any impact on the company's FY13 profit and loss statement. We raise our FY14 earnings estimates for the company as we believe its management is likely to expand its fleet this year given its cleaner balance sheet.
Maintain BUY. We believe that the worst is over for Perdana and expect the flow of more positive news to be the stock's catalyst. Meanwhile, the near term catalysts are: i) the possibility of Dayang securing contracts for the Pan-Malaysia hook-up, construction and commissioning jobs, and ii) the possibility of the company being acquired as the average age of its vessels has come down significantly as it has now disposed of the seven aged vessels, whose age average 30 years. We are nudging up Perdana's FV to RM1.40, pegged to 13x on the stock's 12-month forward earnings, in line with our earnings upgrade for FY14.
Source: OSK
Putting the worst behind. The vessels, expected to be delivered on 15 Mar 2013, will potentially give rise to operating cost savings of about RM10m-RM12m per annum. As Perdana's management has made a provision of RM27.7m in FY12, this sale should not have any impact on the company's FY13 profit and loss statement. We raise our FY14 earnings estimates for the company as we believe its management is likely to expand its fleet this year given its cleaner balance sheet.
Maintain BUY. We believe that the worst is over for Perdana and expect the flow of more positive news to be the stock's catalyst. Meanwhile, the near term catalysts are: i) the possibility of Dayang securing contracts for the Pan-Malaysia hook-up, construction and commissioning jobs, and ii) the possibility of the company being acquired as the average age of its vessels has come down significantly as it has now disposed of the seven aged vessels, whose age average 30 years. We are nudging up Perdana's FV to RM1.40, pegged to 13x on the stock's 12-month forward earnings, in line with our earnings upgrade for FY14.
Source: OSK
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