Research firm ceases coverage on Perdana Petroleum, ahead of re-listing plans

PETALING JAYA: PublicInvest Research is ceasing coverage on Perdana Petroleum Bhd, a stock which has been suspended on the bourse since September 2015, due to the company's continuous weak performance.
The research house reasoned that it will still have exposure to the group via its holding company Dayang Enterprise, and that there has been limited investor interest despite efforts to address the public spread issue.
"Perdana Petroleum's performance has remained weak YoY from lower utilisation at 44%, coupled with a c.25% reduction in charter rates. Its average utilisation for 2QFY17, in line with our expectations improved to 63% supported by the new spot charter marine vessels services contract from PETRONAS Carigali Sdn. Bhd. (PCSB)," the report said.
Perdana Petroleum's net losses for the first six months of the current financial year ended June 30, widened to RM123.55 million from RM38.71 million in the previous year.
The widening losses were attributable to impairment loss on property, plant and equipment as well as a higher net realized/unrealized foreign exchange loss.
Its revenue declined by 30% to RM64.11 million from RM91.39 million due to lower vessel utilisation stemming from slower work orders/contracts awarded from oil majors which were affected by the decline in crude oil prices.
The company is eyeing to make a come-back to the bourse through a re-listing scheduled before the end of September, which will see the company taking on a lower public spread of 20% in compliance with requirements and to allow resumption of trading of its shares upon completion of the distribution-in-specie of up to 292.2million shares owned to its shareholders.
The lower spread and resumption of trading is to facilitate the implementation of a proposed private placement exercise which will see investors determining the trading value of Perdana's shares as well as providing the marker reference price for the placement of shares.
PublicInvest's last call on the stock was neutral, at a price target of 92 sen.