KUALA LUMPUR (Nov 27): UMW Oil & Gas Corp Bhd (UMW-OG) rose 5% in active trade this morning after it returned to the black in3QFY17, after it had been in the red for seven consecutive quarters.

At 9.04am, UMW-OG rose 1.5 sen to 31.5 sen with 7.37 million shares traded.

Net profit came in at RM3.4 million in 3QFY17, compared with a net loss of RM135.4 million in the year-ago corresponding quarter.

Quarterly revenue increased by more than three times to RM180.5 million during the quarter from RM49.7 million recorded in 3QFY16.

For 9MFY17, UMW narrowed its net loss to RM151.7 million from RM267.8 million in the corresponding period a year ago, while revenue grew by 47.6% to RM394.7 million from  RM267.3 million registered in 9MFY16.

Moving forward, UMW said the gradual but continuous increase in oil price indicates potential further recovery in the oil and gas industry, albeit at a slow pace.

Meanwhile, CIMB IB Research has maintained its “Hold” rating on UMW-OG at 30 sen with a higher target price of 33 sen (from 32 sen) and said UMW-OG delivered a 9M17 core net loss of RM148 million, which made up 78% of house previous full-year core net loss forecast, and 42% of consensus, above expectations.

In a note today, the research house said the outperformance was principally due to lower-than-expected operating costs.

“We now project a quarterly profit in 4Q17F, as with 3Q17, thus we narrow our FY17F core net loss and core EPS loss forecasts by 23% and 8%, respectively.

“We revise up our DCF-based target price to 33 sen (Ke: 12.62%), rolling forward to end-CY18F, and maintain our Hold recommendation,” it said.