Maybank IB keeps ‘hold’ on Eversendai on stable earnings

KUALA LUMPUR: Maybank IB Research has maintained a “hold” call on Eversendai Corp Bhd on the back of stabilised earnings, with a new target price of RM1.14.

The research company noted that Eversendai’s quarter-onquarter earnings improved due to higher contribution from India and a small profit reported from the company’s oil and gas division.

“Eversendai’s outstanding order book remains robust at RM2.7 billion after securing RM1.38 billion jobs as at the end of June, largely from the Middle East and growing Indian market.”

Eversendai has a stable contribution from the Middle East and in Malaysia, registering two and four per cent growth, respectively.

“We maintain our job win forecast at RM1.5 billion this year,” said Maybank IB.

The research house stated that Eversendai’s net gearing remained high at 1.08 times as at end of June this year, due to financing of the company’s liftboat contracts.

“Receivables and unbilled amount on work done also remain high at RM1.6 billion as a result of the payment structure of the liftboats,” it added.

Maybank IB said a further rerating catalyst would be the delivery of one of the company’s two liftboats, which was expected in the third or fourth quarter. This could lighten its balance sheet.

Eversendai’s net profit in the second quarter (Q2) ended June 30 jumped 196.85 per cent to RM20.61 million, from a net loss of RM21.28 million in the same period a year ago.

Meanwhile, its revenue in Q2 rose 10.51 per cent to RM465.87 million, from RM421.55 million previously.

In the first half, the group’s business in the United Arab Emirates contributed 56.4 per cent, equivalent to RM485.9 million to its group total revenue, while business in Malaysia contributed 11.4 per cent to its revenue.

Eversendai said its oil and gas division contributed 15.9 per cent to its total revenue in Q2, while business in the Indian subcontinent contributed 13.9 per cent.

Remaining revenue was derived from its operations in Singapore and Thailand.

Eversendai said it was confident of achieving higher revenue and profitability, spurred by the current order book in hand, amounting to RM2.7 billion. Ayisy Yusof