KUALA LUMPUR, 30 JUNE: Despite the company’s recent loss of RM97.07 million in the first quarter ended April 30, 2021 (1QFY22), Hong Leong Investment Bank (HLIB) Research and JF Apex Research have kept their ‘buy’ calls and target prices (TPs) for Sapura Energy Bhd. Despite the losses, HLIB Research claimed Sapura Energy’s 1QFY22 results were “acceptable.”
“Sapura recorded a 1QFY22 core loss of RM9.2 million (quarter-on-quarter: -RM76 million, year-on-year: -RM11.5 million), which we deem to be in line with our (FY22f: RM94.1 million) expectations but above consensus’ (FY22f: -RM56.5 million) forecast for FY22 as we expect its results to improve sequentially due to higher oil prices and higher expected earnings f,” according
Sapura Energy’s orderbook stood at RM11.8 billion as of 1QFY22, with RM25 billion in active bids and RM29 billion in bids already submitted, according to HLIB Research.
Sapura Energy will also continue to pursue its various cost-cutting efforts in order to increase its margins, according to the statement.
HLIB Research noted that it is keeping its FY22-23f earnings predictions since it anticipates Sapura Energy’s results will improve sequentially. The local research firm has maintained its “buy” call on the company, with a target price of 15 sen.
“We believe that the recent increase in oil prices will result in increased work activity for its E&C division, which will directly transfer into greater earnings for its E&P division, which is seeing an increase in production volumes. As evidenced by the current quarter’s results, its drilling division is projected to stay strong. Sapura intends to take on more gas projects in the future, as well as develop its sustainable wind energy company, in order to prepare for the global energy shift to greener fuels “According to HLIB Research.
JF Apex Research has also maintained its profitability forecast for FY22, citing “increased oil prices, greater cost management methods, and the potential to replenish orderbook.”
It went on to say that the 1QFY22 net loss and revenue fell short of the full-year target of a net profit of RM99 million and revenue of RM7.2 billion.
The stock gets a “buy” call from JF Apex Research with a target price of 17 sen.
Sapura Energy shares were stable at 13 sen at the time of writing, giving the business a market capitalization of roughly RM2.07 billion. Continue reading
