Thursday 28 Mar 2024
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KUALA LUMPUR (May 26): Hibiscus Petroleum Bhd rose in active trade on Thursday morning (May 26), taking the top seventh spot in the active stock list on Bursa Malaysia, after announcing that its net profit for the third quarter ended March 31, 2022 (3QFY22) jumped nearly 10-fold to RM307.54 million from RM32.03 million a year ago.

This improvement in earnings was supported by the newly acquired assets and high average realised oil prices, coupled with careful management of costs and an efficient operational performance. 

At the time of writing on Thursday morning, the counter had seen 15.08 million shares change hands, and up 1.46% or two sen from Wednesday to RM1.39. 

Year to date, its share price is up 69.51% from 82 sen on Jan 3. 

On Wednesday, the oil and gas company said its quarterly revenue jumped by 37.54% year-on-year to RM297.06 million. 

For the cumulative nine months ended March 31, 2022 (9MFY22), the group's net profit increased more than seven times to RM397.55 million from RM54.08 million a year earlier, while revenue came in 50.09% higher at RM828.15 million for the same period. 

In a Thursday report, Hong Leong Investment Bank (HLIB) Research maintained its "buy" call on Hibiscus with a lower target price of RM1.73/share (from RM1.85) — based on net present value of all its producing assets’ future free cash flows — after accounting for each asset’s targeted lifespan. 

“At about only five times FY23 price-earnings, we believe that Hibiscus is a compelling case and conspicuously undervalued given its strong foothold in the upstream energy space,” it added.  

HLIB Research deemed Hibiscus’ 3QFY22 results to be below expectations at 37% of its full-year forecast and 39% of the consensus. 

“We highlight that the poor performance in 3QFY22 was due the unfortunate offtake timings throughout the quarter and with that, we view that it would not be a fair representation of what a 'normal' quarter would look like post-FIPC acquisition,” it added. 

In January this year, Hibiscus through its indirect wholly-owned subsidiary Peninsula Hibiscus Sdn Bhd successfully completed the acquisition of the entire equity interest in Fortuna International Petroleum Corp (FIPC) from Repsol for a purchase price of US$212.5 million (about RM890.06 million).

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