PETALING JAYA: Fresh from securing its latest contract from Philippine Geothermal Production Company (PGPC), Uzma Bhd
’s prospect for more contract wins going into next year remains bright.
Phillip Capital Research expects the strong momentum in contract flows for Uzma to continue through to financial year 2025 (FY25), supported by its enormous tender book of RM5.5bil.
“We remain positive on Uzma’s earnings prospects, driven by increased offshore activity, the commencement of the large scale solar four project, and healthy order book visibility,” the research house added.
Uzma announced it secured a well-services contract with the PGPC to provide drilling and cementing services for its geothermal fields in the Philippines.
PGPC operates the Tiwi geothermal steam field in the province of Albay and the Mak-Ban geothermal steam field in the provinces of Laguna and Batangas. The contract is for three years and expires on Aug 31, 2027.
“We estimate this contract to be valued at RM30mil. Assuming a group blended profit after tax and minority interest margin of 8% to 9%, we expect this contract to contribute about RM1mil over FY25 to FY27, comprising 2% of our current projected earnings.
“We gather PGPC had previously awarded Uzma with a contract of a less than one-year duration.
“However, this maiden three-year long-term contract reflects the client’s confidence in Uzma’s capabilities in delivering well services, in our view.
“Year-to-date contract wins of RM690mil brought its latest order book to RM2.9bil as of October,” it said.
The brokerage has reiterated its “buy” rating on Uzma with a target price of RM1.78 a share.
