KUALA LUMPUR (Nov 20): Despite a turnaround at Hibiscus Petroleum Bhd’s (KL:HIBISCS) offshore assets in its recent quarterly results, Public Investment Bank (PublicInvest) kept its stance on the stock amid bearish sentiment on oil price.
PublicInvest maintained a “neutral” call on Hibiscus, with a target price of RM1.79, and revised its earnings estimates for FY2025-FY2026 downwards, citing potential downside risks from lower oil price assumptions going into 2025.
“Nevertheless, the results were broadly in line with our estimates at 23.6%, but lagged with consensus at 18.9% of full-year estimates. In our sector report dated Nov 15, we have reduced our FY2025F-FY2026F earnings forecasts by an average of 21% to reflect lower oil-price assumption (from US$85/barrel of crude oil (bbl) to US$70 (RM312)/bbl),” said PublicInvest in a note on Wednesday.
PublicInvest noted that Hibiscus’ 1QFY2025 results being in line with its estimates was mainly due to a turnaround at Hibiscus’ Anasuria assets and major maintenance (PM3 CAA and Kinabalu). The company recorded a 1QFY2025 core net profit of RM95.3 million, down 39.1% year-on-year, and 36.0% quarter-on-quarter.
The research house said this led to lower daily production rates of 16,707 per barrel of oil equivalent (boe)/day, as compared to 20,144 boe/day in the previous quarter.
The house noted that Hibiscus’ operating expenses also climbed, with net operating costs per barrel of oil equivalent (boe) rising to US$39.10, from US$32.80 in the preceding quarter.
Looking ahead, Hibiscus is expected to rebound in the second quarter of FY2025, supported by increased contributions from its Brunei assets and improved operational output.
Hibiscus shares were unchanged at RM1.93 at noon break on Wednesday, giving the company a market capitalisation of RM1.55 billion.