On Hibiscus’ 3QFY21 financial results, the group said it had markedly improved compared to the previous financial quarter ended December 31, 2020 (2QFY21), driven by improving oil prices.
KUCHING (MAY 25) Hibiscus Petroleum Bhd’s (Hibiscus) first nine months of financial year 2021 (9MFY21) came in above analysts’ expectations thanks to an increase in the group’s North Sabah production sharing contract’s (PSC) 9MFY21 sales.
“Hibiscus’ 9MFY21 core net profit of RM61 million was above expectations, accounting for 82 per cent of consensus and almost reaching our earlier FY21F earnings,” AmInvestment Bank Bhd (AmInvestment Bank) said.
“This was mainly due to its 50 per cent-owned North Sabah PSC’s 9MFY21 sales rising 28 per cent year on year (y-o-y) to 2.1 million barrels.”
However, the research firm highlighted that y-o-y, Hibiscus’ 9MFY21 net profit fell 42 per cent y-o-y from the 23 per cent–24 per cent drop in crude oil price to US$46 per barrel due to the Covid-19-inflicted demand collapse last year, partly offset by a 20 per cent sales volume increase to 2.8 million barrels.
On Hibiscus’ 3QFY21 financial results, the group said it had markedly improved compared to the previous financial quarter ended December 31, 2020 (2QFY21), driven by improving oil prices.
For its 3QFY21 results, the group announced revenue and profit after tax (PAT) of RM216 million and RM32 million respectively with earnings before interest, tax, depreciation and amortisation (EBITDA) for the period reported at RM122.4 million.
The research firm noted that quarter on quarter (q-o-q), the group’s 3QFY21 net profit surged 2.7-fold to RM35 million mainly due to the higher crude oil prices and partly from 18 per cent lower operating costs, partly offset by a 31 per cent drop in North Sabah’s sales to 600,000 barrels.
“Even though 3QFY21 average crude oil prices rose by 32 per cent q-o-q to US$54 per barrel for North Sabah PSC and surged 52 per cent q-o-q to US$60 per barrel for the group’s 50 per cent-owned Anasuria concession, the 9MFY21 average of US$46 per barrel is still in line with our FY21F estimate of US$50 per barrel.”
Looking ahead, AmInvestment Bank gathered that by the end of 2022, Hibiscus may be looking to achieve first oil from its recently acquired 70 per cent interest in the Teal West field together with an 85 per cent working interest and operational control of the nearby Eagle pre?producing area, which was a farm-in arrangement with EnQuest.
“This will be achieved via a tie-back to Anasuria’s facilities and FPSO.
“Meanwhile, production commencement from its 50 per cent equity stake in Block 15/13a of the Marigold and Block 15/13b of the Sunflower concessions, which were acquired for US$37.5 million cash from Caldera Petroleum in October 2018, could be delayed to late 2023.”
The research firm also noted that based on the enterprise value for the group’s existing 2P reserves, Hibiscus is currently only trading at US$5.09 per barrel, at a discount of 44 per cent to its closest peer, UK-listed EnQuest and less than half of the regional average.
“This is compelling given the higher Brent crude oil price of US$68 per barrel currently versus our US$60 per barrel assumption, while the group’s valuation can be driven even further by a significant regional asset acquisition.”