Table 1 : Investment Statistics (SAPCRES; Code: 8575) Bloomberg: SCRES MKNet Basic Adj. FD FD EPS FD NetFYETurnover Profit EPS EPS Growth PER C. EPS* P/NTA P/CF gearing GDYJan(RMm) (RMm) (sen) (sen) (%) (x) (sen) (x) (x) (x) (%)
20103,257.3 170.2 13.3 13.3 66.0 17.5 - 2.8 3.6 Net cash 2.62011f 3,824.8 215.3 16.9 16.9 26.5 13.9 17.0 2.3 8.3 Net cash 3.02012f 4,373.1 236.7 18.5 18.5 10.0 12.6 19.1 2.0 4.6 Net cash 3.02013f 4,653.1 249.1 19.5 19.5 5.2 12.0 23.3 1.8 4.3 Net cash 3.0
Main Market Listing / Non-Trustee Stock / Syariah-Approved Stock By The SC * Consensus Based On IBES Estimates
New contracts for both rigs.
Sapuracrest announced yesterday that two of its drilling rigs,
the T-6 and T-10 that faced expiring contracts in FY10, havebeen awarded new contracts. The T-6 was awarded a US$85m (RM269.5m)28-month contract from existing client CPOC; while the T-10 was charteredby Seadrill UK on bareboat basis for the duration of 24 months at a contractvalue of US$49m (RM155.3m).
T-6 rates sustained but T-10 rates are lower.
The T-6 contracttranslates to a charter rate of US$99k per day (slightly lower than theprevious US$101k day rates). However, the T-10 rates are now aroundUS$65k; 29% less than the previous per day charter rate of US$92k. Wesuspect this could be due to the new contract being on bare-boat basisrather then on a full service basis. The new T-10 charter rates are lower thanour assumed per day charter rates of RM104.1m per annum.
1) Rising costs of materials, labour and assets; 2) Potential marginsqueeze for the IPF division due to price competition for new contracts; 3)Continued losses on the marine division; and 4) Delays in contracts due to areview of the safety standards and designs of offshore facilities.
Forecasts adjusted slightly.
Given that the new drilling charter rates arelower than our initial assumptions, we lower our FY01/12-13 revenueforecasts slightly by 0.7-0.6% p.a. Our changes are only impacted in F12-13as the contracts will take effect late-CY10. Consequently our FY12-13 EPSforecasts fall by 1.9% and 1.8% respectively.
We reiterate that while SapuraCrest has a leadingposition in its business segments and will likely stand a strong chance of being awarded new contracts under more robust market conditions, we arestill wary of the prevailing uncertain conditions in the oil and gas sector. Wetrim our fair value to RM2.41/share (vs. RM2.46 previously) based on 13xFY01/12 PER and maintain our
call on the stock.
Charters For T-6 And T-10 Drilling Rigs
M a l a s i a
RHB ResearchInstitute Sdn Bhd
A member of theRHB Banking Group
Company No: 233327 -M
2 September 2010
Share Price : RM2.34Fair Value : RM2.41Recom :
Issued Capital (m shares)1,276.7Market Cap (RMm)2,987.5Daily Trading Vol (m shs)2.052wk Price Range (RM)1.62-2.58
Major Shareholders: (%)
Sapura Hldgs/related parties 40.3Seadrill 23.6EPF 9.2
FYE Jan FY11 FY12 FY13
EPS chg (%)- (1.9) (1.8)Var to Cons (%)(0.8) (2.9) (16.3)
PE Band ChartRelative Performance To FBM KLCI
Yap Huey Chiang(603) 9280 email@example.com
Please read important disclosures at the end of this report.
M A R K E T D A T E L I N E
P P 7 7 6 7 / 0 9 / 2 0 1 0 ( 0 2 5 3 5 4 )
PER = 20x
PER = 16x
PER = 12x
PER = 8x