PETALING JAYA: Uzma Bhd
’s newly secured contract is poised to uplift the group’s year to date cumulative contract value to about RM730mil, which adds to its order book of RM2.8bil and provides strong earnings visibility over the next three years.
Phillip Capital Research said while no official value was disclosed for its recent win, it estimates the contract value to be about RM20mil and this implies a RM3mil value for each well.
The duration of the contract was not specified, as it depends on the time required to complete each well, which varies based on the structural complexity of the wells.
Assuming Uzma completes the six wells in the financial year 2025 (FY25) with a group blended profit after tax and minority interest margin of 8% to 9%, Phillip Capital estimates this contract to contribute about RM2mil net profit.
It said four out of eight hydraulic workover units will be operational with this contract win. Including this contract, the year-to-date cumulative contract win amounts to about RM730mil.
The research house made no changes to its earnings forecast and expects the strong momentum in contract flow to persist in the second half of 2024, supported by increasing domestic brownfield activities and a sizable RM3.6bil tender book.
Phillip Capital also reiterates its “buy” rating and RM1.78 a share target price based on an unchanged 12 times price earnings ratio multiple on FY25 earnings per share.
