KUALA LUMPUR (Oct 23): AllianceDBS Research Sdn Bhd downgraded its earnings forecast for Coastal Contracts Bhd by 7% in anticipation that the latter may take a longer time to clinch a charter for its maiden oil and gas drilling rig.
In a note today, AllianceDBS analyst Arhnue Tan said the research firm now expected the charter to start in April 2015. AllianceDBS had earlier anticipated the lease to begin in January 2015.
"With many new rigs coming onto the market, and as a new player, it may take longer for Coastal to secure a charter. This lowers our FY15F earnings by 7%.
"We lower our TP (target price) to RM5.55 from RM6.00 previously given the earnings downgrade," Tan said.