Stock Of The Week : Perdana Petroleum Bhd

PERDANA PETROLEUM Bhd, which had early this month executed the bonus issue of its equity shares, had performed generally well in the stock market this year.

There is more potential upside for the counter, which gained three sen yesterday to close at RM1.45.

The oil and gas services provider expects to benefit from future contract flows from new developments in the oil and gas industry, such as enhanced oil recovery initiatives and marginal fields.

Last month, Petroleum Perdana terminated a bareboat charter on three vessels, and entered into a memorandum of agreements to acquire the vessels instead for a total of US$50mil.

The move is expected to enhance the company’s bottom line next year.

In general, 2014 is set to be a good year for Petroleum Perdana, especially with its associate company Dayang Enterprise Holdings Bhd starting its topside major maintenance/hook-up construction and commissioning project in the year ahead.

RHB Research in a recent note quoted the management as saying that including the vessels chartered to Dayang, 15 of Petroleum Perdana’s 17 vessels are now on long-term charters. Its current orderbook totals RM1.4bil, with five years’ earnings visibility.

For the nine months to September 2013, Petroleum Perdana’s net profit more than tripled to RM39.8mil from RM12.1mil in the corresponding period a year earlier.

Earnings per share stood at 7.94 sen, compared with 2.45 sen previously.

Group revenue, on the other hand, increased only a marginal 0.6% to RM196.6mil compared with RM195.3mil previously.- Source from thestar.com.my