Uzma secures more jobs from Petronas Carigali

This article first appeared in The Edge Financial Daily, on January 12, 2018.

Uzma’s share price rebounded recently in line with improved sentiments on oil and gas counters on Bursa.

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KUALA LUMPUR: Just two days ago, Uzma Bhd won three umbrella contracts from Petronas Carigali Sdn Bhd. Yesterday, the company announced that it had bagged two more contracts from the national oil firm’s exploration and production unit.

One is an umbrella contract for the provision of 340K and 460K Hydraulic Workover Unit (HWU) to Petronas Carigali. The other contract is for the provision of Ghazi 461 HWU to Petronas Carigali.

The umbrella contract’s tenure is for three years from Dec 22, 2017 to Dec 21, 2020 with an extension option of one year. It is awarded to Uzma’s wholly-owned unit Uzma Engineering Sdn Bhd (UESB).

This is the fourth umbrella contract that Uzma has announced this week. Uzma pointed out the umbrella contract does not constitute a commitment for any specific work.

The umbrella contract’s execution is depending on work orders to be issued to UESB from time to time at Petronas Carigali’s discretion. As such, there is no firm value for the umbrella contact, according to the company.

Uzma will make an announcement when a material sum of work order is received under the umbrella contract, it said.

In a separate announcement, the contract for the provision of Ghazi 461 HWU, Uzma said, has a tenure from Dec 28, 2017 until the completion of three firm wells with an extension option of a further 2+1+1+1+1 wells.

“The extension option for the additional six wells does not constitute a commitment for any specific work. The contract’s execution is depending on work orders to be issued to UESB from time to time at Petronas Carigali’s discretion. As such, there is no firm value for the contact extension,” said Uzma.

In both filings with Bursa Malaysia, Uzma said the contracts are expected to contribute positively to its earnings and enhance the company’s net assets per share from the financial year ending June 30, 2018 (FY18) until the umbrella contract’s expiry.

Uzma’s share price dived to a four-year low of RM1.28 last month. It rebounded recently in line with improved sentiments on oil and gas counters on Bursa. The stock closed at RM1.50 yesterday, down one sen, with 1.18 million shares traded. It has a market capitalisation of RM476.84 million.

The company posted lower net profit of RM17.87 million for the nine-month period ended Sept 30, 2017 (9MFY17), compared with RM26.55 million in the previous corresponding period. Revenue dropped to RM265.3 million in 9MFY17 from RM332.29 million a year ago.

In its financial results release, Uzma noted its gross profit increased 26.4% to RM103.28 million in 9MFY17 from RM81.7 million due to wider profit margin.