KUALA LUMPUR (May 20): Shares in Hibiscus Petroleum Bhd dipped as much as 2.48% in active morning trade today, after reporting that its net profit for the third quarter ended March 31, 2020 (3QFY20) fell 48.42% year-on-year (y-o-y) to RM28.47 million from RM55.18 million on lower revenue recorded.

At 10.37am, Hibiscus fell 1.5 sen to 59 sen, bringing a market capitalisation of RM960.88 million. It saw some 61.1 million shares traded.

The stock was among the most actively traded on Bursa Malaysia. At 10.39am, Bursa’s Energy Index, which tracks the share prices of oil and gas-related companies, fell 11.55 points or 1.4% to 810.52 points.

Meanwhile, Reuters said oil prices dipped on Wednesday as concerns over the lasting economic fallout from the coronavirus pandemic outweighed signs of improving demand and production cuts by major oil producers.

Brent crude futures for July delivery were trading down 11 cents, or 0.3%, at US$34.54 per barrel at 0031 GMT.

US West Texas Intermediate (WTI) crude futures for July were down 13 cents, or 0.4%, at US$31.83 a barrel. The July contract became the front month after WTI futures for June expired on Tuesday, avoiding the chaos of last month's May expiry when prices slid into negative territory.

In a note today, Public Invest Research said Hibiscus reported core net profit of RM181.2 million (-18.2% year-on-year), in tandem with lower revenue of RM607 million (-19.2% year-on-year), attributed to less off takes in the Anasuria field as well as lower average realized oil price for both fields.

“Given the current oil price condition, targeted opex at the Anasuria field for the remaining CY20 is US$18.5/boe,” it said.

The research house added that Hibiscus' locked-in future sales of 750,000 bbls with Trafigura for its North Sabah oil is priced at US$35/bbl earlier this month.

However, it said, the deal will only be executed in the first half of financial year 2021 (1HFY21).

“While the results are 93.2% of our full-year expectations, we deem it as having missed as we anticipate the group to report a loss in 4QFY20 due to potentially zero off-takes.

“The numbers are above consensus’ full year forecasts of RM127.5 million, however. We cut our FY20-22F earnings forecast by 23.6% to account for lower oil sold, in addition to adjustment made earlier in our sector piece dated April 8,” it noted.

Public Invest Research has maintained its “neutral” rating on Hibiscus with discounted cash flow based target price adjusted lower to 65 sen.