KUALA LUMPUR, Jan 16 – Alam Maritim Resources Bhd's shares were actively traded in the morning session following the awarding of a RM576 million worth Petronas Carigali contract to its wholly-owned unit, Alam Maritim (M) Sdn Bhd.
The company announced the awarding of the contract yesterday.
At 11 am, the share rose four sen or 4.68 per cent to 89.5 sen with 25.6 million shares traded.
Kenanga Research said the contract for the provision of six units of marine vessels for five years with a one-year extension option, was projected to yield a net profit of RM84.6 million based on a margin of 15 per cent.
However, Kenanga Research kept Alam Maritim's earning estimates unchanged as the research house has already assumed higher utilisation rates of 80 per cent and 83 per cent for the company's offshore support vessel (OSV) segment in the financial year 2013 and financial year 2014 respectively.
Meanwhile, OSK Research viewed the contract as "positive", saying that the average rates of contracts secured had improved by 15-20 per cent compared to the previous year.
Nevertheless, it said Alam Maritim's key risk was on the lack of contracts for the offshore, installation and construction (OIC) and subsea division, which will run out of jobs in April.
"As the losses are estimated at RM3 million-RM4 million per month (assuming if there are no jobs), the losses will offset the earnings growth from its OSV business."
Kenanga Research maintained the "outperformed" view on Alam Maritim with a higher target price of RM1.09 from 92 sen previously while OSK Research also kept its "buy" call on the company and retained the target price at RM1.25. – Bernama
