KUALA LUMPUR (Nov18): Deleum Bhd share price rebounded today after the oil & gas firm reported higher profit for the third quarter ended Sep 30 (3Q14).
The stock hit an intraday high of RM1.83 this afternoon before retreating to close at RM1.82, up 7.7% or 13 sen. Some 763,900 shares changed hands.
UOBKayHian Research commented that Deleum was “one of the most resilient companies within our oil and gas (O&G) universe”, unaffected by falling oil prices.
The research house gave the company a "Buy" rating with a target price of RM2.40 in a note to its clients today.
“It has a large order backlog that provides relatively long-term earnings visibility. More importantly, the O&G services Deleum provides, such as gas turbine maintenance and well management or intervention services for existing oilfields are mainly operating expenses for oil producers,” it added.
Alliance DBS Research, on the other hand, rated Deleum a "Hold" with a target price of RM1.90. It noted that while Deleum’s orderbook is strong and shows earnings visibility, there was absence of catalyst.
“While earnings are secure, we do not see exciting news flow for Deleum in the immediate term. The bulk of the group’s long term service contracts were secured in FY13 (ended Dec 31),” it said in a research note today.
Deleum announced its net profit grew by 17.3% year-on-year to RM16.8 million, or 4.21 sen which was in line with analysts’ consensus estimates. Quarter-on-quarter, the company’s net profit grew 5.6%.
For the nine-month period ended Sept 30, the company’s net profit expanded to RM42.5 million from RM34.9 million. Its earnings per share increased to 10.63 sen from 8.75 sen a year ago.