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Tuesday, March 1, 2011

Petra - Stay off this ship (CIMB)

Maintain UNDERPERFORM. Petra Perdana’s 4Q10 net loss of RM18m took full-year net loss to RM72m, 44% worse than our forecast and 52% worse than consensus estimate. The variance was due to weak charter rates, impairment losses and Petra Energy’s (PENB MK, Not Rated) loss. Another negative was the absence of a dividend for FY10 as we had forecast 2 sen.

We are cutting our EPS forecasts by 3.1% for FY11 and 4.2% for FY12 as Petra will take delivery of four vessels this year instead of five we were expecting. Imputing changes in the vessels’ book values, we cut our RNAV-based target price from RM1.01 (Figure 1) to RM0.87 (Figure 2). Petra remains an UNDERPERFORM, with the potential derating catalysts being further weakness in charter rates and Petra Energy’s performance. Switch to our top pick SapuraCrest (SCRES MK, Outperform).

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